| Snowflake Score | |
|---|---|
| Valuation | 3/6 |
| Future Growth | 2/6 |
| Past Performance | 4/6 |
| Financial Health | 1/6 |
| Dividends | 3/6 |
QSR Stock Overview
Restaurant Brands International Inc. operates as quick service restaurant company in Canada and internationally.
Restaurant Brands International Competitors
Price History & Performance
| Historical stock prices | |
|---|---|
| Current Share Price | US$59.59 |
| 52 Week High | US$65.64 |
| 52 Week Low | US$46.68 |
| Beta | 0.99 |
| 1 Month Change | 14.44% |
| 3 Month Change | 17.23% |
| 1 Year Change | -6.35% |
| 3 Year Change | -19.81% |
| 5 Year Change | -0.10% |
| Change since IPO | 62.33% |
Recent News & Updates
Restaurant Brands Q2 2022 Earnings Preview
Restaurant Brands (NYSE:QSR) is scheduled to announce Q2 earnings results on Thursday, August 4th, before market open. The consensus EPS Estimate is $0.73 (-5.2% Y/Y) and the consensus Revenue Estimate is $1.57B (+9.2% Y/Y). Over the last 2 years, QSR has beaten EPS estimates 88% of the time and has beaten revenue estimates 75% of the time. Over the last 3 months, EPS estimates have seen 6 upward revisions and 15 downward. Revenue estimates have seen 11 upward revisions and 6 downward.
Does Restaurant Brands International (NYSE:QSR) Have A Healthy Balance Sheet?
David Iben put it well when he said, 'Volatility is not a risk we care about. What we care about is avoiding the...
Restaurant Brands International Inc.'s (NYSE:QSR) Intrinsic Value Is Potentially 32% Above Its Share Price
Does the July share price for Restaurant Brands International Inc. ( NYSE:QSR ) reflect what it's really worth? Today...
Restaurant Brands International: Q2 Results Likely To Beat Expectations On Strong Business Momentum
The opening up of Canada and the firm’s international markets was possibly a continued predominant tailwind for sales. Digital, delivery, and increased dine-in sales which drove upside over the first quarter, probably delivered during the second quarter as well. Burger King U.S. likely continued to recapture market share due to turnaround efforts. We’re maintaining our 1-year Price Target of $101/share for QSR. Reiterate Buy Rating. Investment Conclusion Restaurant Brands International (QSR) is anticipated to report F2Q2022 financial results in the last week of July (based on historical trends). Analysts expect revenues of $1.56 billion and earnings per share of $0.73 for the quarter. Considering that there appears little change in business conditions compared to the first quarter, we believe the strong sales momentum experienced over the prior quarter is likely to have persisted in the second quarter. Therefore, we believe, F2Q2022 financial results will possibly come in ahead of Street expectations. To be specific, we believe, system sales and same-store sales associated with Tim Hortons Canada and Burger King International continued to outperform, based on turnaround initiatives rolled out at Tim Hortons over the past three years, and the return of mobility in Canada, and overseas Burger King locations. In addition, we expect that Burger King’s U.S. business grabbed additional market share on the heels of a strong recovery in the first quarter, based on a slew of changes implemented over the pandemic, including significant menu innovation, increased focus on value deals, and the roll-out of digital menu boards at drive-thrus. Further, we anticipate some increase in sales associated with Popeyes and Fire House Subs, due to solid geographic expansion over recent quarters. Moreover, despite, our expectation of sequentially higher dine-in sales across all four of QSR brands, contribution of digital sales as a fraction of total sales likely advanced, due to the firm’s implementation of strategies to improve customer experience associated with the category. Furthermore, considering that more than 40% of QSR’s sales are derived from its international business, the impact of cost inflation related to commodities and labor was likely lighter, and along with revenue leverage from our expectations of dramatically higher sales, possibly reflected in strong margin expansion over the second quarter. Consequently, as a function of the anticipated considerable growth in sales and margins, we expect improvement in year-over-year earnings and free cash flows for F2Q2022. For the back-end of the year, we anticipate continued strong growth in sales driven by the factors that fueled the first quarter outperformance and the likely second quarter upside, and some easing in inflationary pressures associated with the U.S. business, reflecting in further margin expansion, and therefore incremental growth in profits and free cash flows for the entire year. Overall, based on a potentially strong financial performance, FY2022 will probably be the year that QSR’s business turns around from the challenges it struggled with over the past three years. Longer-term, QSR represents a significant growth opportunity, as all four of its brands have substantial growth ahead of them, through international expansion. In that regard, Tim Hortons, Popeyes, and Fire House Subs, are barely penetrated in foreign markets, and although Burger King has a considerable presence outside the U.S., its footprint appears insignificant compared to McDonald's (MCD), its closest competitor. In addition, management has indicated that all four brands, but particularly Popeyes, have room to grow in home markets. Beyond geographic expansion, additional advancement in retail sales, in the form of same-store sales growth, is likely to be derived from greater convenience, menu innovation, and loyalty programs. Higher retail sales will reflect in revenue leverage, resulting in margin expansion at the restaurant level and corporate level. In addition, margins will continue to benefit from economies of scale related to procurement of commodities, corporate overhead, technology, the digital platform, and advertising. As a flow-through, profits and free cash flows are likely to surge, on a secular basis. Given that F1Q2022 results have not altered our long-term outlook on QSR, we remain constructive on the company. Therefore we’re reiterating our 1-year Price Target of $101/share and Buy Rating for the stock. Please note that there is upside to our Price Target as it ignores potential earnings from the acquisition of Fire House Subs. (Please go through our initiation report “Restaurant Brand International: Significantly Under Valued – Buy On Growth Plans” and related notes for our long term opinion on the stock). Key Take-Aways From The First Quarter F1Q2022 Results Summary. For the quarter, retail sales came in at ~$9.03 billion (+13.7% compared with F1Q2021), revenues were ~$1.45 billion (+15.2% on a year over year basis), above consensus estimates of $1.42 billion, and earnings per share came in at $0.64 (+16.4% compared to F1Q2021), beating analyst projections of $0.62. In addition, comparable sales increased: by 8.4% at Tim Hortons, by 10.3% at Burger King, and decreased by 3% at Popeyes, during F1Q2022. Net income for the period was ~$295 million, reflecting an increase of 14.8% over the previous year’s same quarter. Cash flows from operations and free cash flows were $234 million and $1.59 billion, for 3-months ended FY2022. Tim Hortons Firing On All Cylinders. The brand’s turnaround is complete. Driven by increased mobility throughout Canada, particularly in Ontario, where pandemic restrictions were the most stringent, and the super urban areas where foot traffic was extremely strong, system sales expanded by 12.9% and same-store sales advanced by 8.4%. The sales upside was widespread with improvement evident across all segments of the day and across all regions of Canada. The efforts expended over the last three years to turnaround the business combined with the complete opening up of the Canadian economy created a perfect storm situation, that resulted in strong sales momentum. Menu innovation that was central to the turnaround strategy, with improvement in coffee, new breakfast items, including fresh cracked eggs, which reflected in the first quarter generating the highest breakfast sales in five years, and novel beverages continuing to deliver. In addition, the annual “Roll Up To Win” promotion drove digital sales to 36% of total sales for the first quarter, and 40% for March. Digital sales were also supported by the brand’s loyalty program, which experienced strong customer uptake over the period. Recall that digital sales generate the highest margins, and customers that transact online, order more frequently and with higher check values, rendering sales in the category, highly valuable. Burger King U.S. On Track To Recovery. Following implementation of initiatives to turnaround Tim Hortons Canada, QSR increasingly focused on the Burger King U.S. business which based on disappointing financial results appeared to be on a downturn even before the pandemic surfaced, though the viral outbreak further damaged the enterprise. Those efforts appear to be succeeding as guest satisfaction scores have improved over the previous three quarters. Further, based on management commentary, the business managed to recapture a few hundred basis points of market share from competitors, over recent quarters. Additional endeavors, including a switch in the advertising agency with a view to improve messaging and communications, simplification of kitchen operations to save time and improve food flavor, upgrades to the digital platform to support customer experience, and remodeling of stores to the “Burger King Of Tomorrow“ image, are continuing to be rolled out, under the leadership of the new head of Burger King North America, Tony Curtis, a 35-year veteran of the quick service restaurant industry, who took the helm in F3Q2021. Considering that ~50% of Burger King’s business is derived from its U.S. operations, we are encouraged that QSR’s initiatives to turnaround the enterprise are being rewarded. In addition, given that Tim Hortons recovery was engineered by largely the same management team, we believe that it is only a matter of time, before a reinvented Burger King U.S. emerges, driving significant gains in top-line and bottom-line outcomes. Popeyes Performance Mixed. The brand delivered strongly on the primary long-term growth driver, new unit development, launching the largest class of first quarter new stores, since the founding of the chicken focused restaurant chain. During FY2022, QSR expects to open a record number of new Popeyes locations, including 200 restaurants in North America and entering new markets such as France and Romania.
Shareholder Returns
| QSR | US Hospitality | US Market | |
|---|---|---|---|
| 7D | 11.2% | 2.7% | 1.0% |
| 1Y | -6.3% | -20.1% | -12.9% |
Return vs Industry: QSR exceeded the US Hospitality industry which returned -20.1% over the past year.
Return vs Market: QSR exceeded the US Market which returned -12.9% over the past year.
Price Volatility
| QSR volatility | |
|---|---|
| QSR Average Weekly Movement | 4.1% |
| Hospitality Industry Average Movement | 8.8% |
| Market Average Movement | 7.9% |
| 10% most volatile stocks in US Market | 17.1% |
| 10% least volatile stocks in US Market | 3.2% |
Stable Share Price: QSR is less volatile than 75% of US stocks over the past 3 months, typically moving +/- 4% a week.
Volatility Over Time: QSR's weekly volatility (4%) has been stable over the past year.
About the Company
| Founded | Employees | CEO | Website |
|---|---|---|---|
| 1954 | 5,700 | Jos Cil | https://www.rbi.com |
Restaurant Brands International Inc. operates as quick service restaurant company in Canada and internationally. It operates through four segments: Tim Hortons (TH), Burger King (BK), Popeyes Louisiana Kitchen (PLK), and Firehouse Subs (FHS). The company owns and franchises TH chain of donut/coffee/tea restaurants that offer blend coffee, tea, and espresso-based hot and cold specialty drinks; and fresh baked goods, including donuts, Timbits, bagels, muffins, cookies and pastries, grilled paninis, classic sandwiches, wraps, soups, and others.
Restaurant Brands International Fundamentals Summary
| QSR fundamental statistics | |
|---|---|
| Market Cap | US$26.76b |
| Earnings (TTM) | US$819.00m |
| Revenue (TTM) | US$6.13b |
22.2x
P/E Ratio3.0x
P/S RatioIs QSR overvalued?
See Fair Value and valuation analysisEarnings & Revenue
| QSR income statement (TTM) | |
|---|---|
| Revenue | US$6.13b |
| Cost of Revenue | US$3.60b |
| Gross Profit | US$2.54b |
| Other Expenses | US$1.72b |
| Earnings | US$819.00m |
Last Reported Earnings
Jun 30, 2022
Next Earnings Date
n/a
| Earnings per share (EPS) | 2.68 |
| Gross Margin | 41.36% |
| Net Profit Margin | 13.36% |
| Debt/Equity Ratio | 331.5% |
How did QSR perform over the long term?
See historical performance and comparisonDividends
3.6%
Current Dividend Yield81%
Payout RatioDoes QSR pay a reliable dividends?
See QSR dividend history and benchmarks| Restaurant Brands International dividend dates | |
|---|---|
| Ex Dividend Date | Sep 20 2022 |
| Dividend Pay Date | Oct 05 2022 |
| Days until Ex dividend | 43 days |
| Days until Dividend pay date | 58 days |
Does QSR pay a reliable dividends?
See QSR dividend history and benchmarksValuation
Is QSR undervalued compared to its fair value, analyst forecasts and its price relative to the market?
Valuation Score
3/6Valuation Score 3/6
Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
Analyst Forecast
Key Valuation Metric
Which metric is best to use when looking at relative valuation for QSR?
Other financial metrics that can be useful for relative valuation.
| What is QSR's n/a Ratio? | |
|---|---|
| n/a Ratio | 0x |
| n/a | n/a |
| Market Cap | US$26.76b |
| Key Statistics | |
|---|---|
| Enterprise Value/Revenue | 5.5x |
| Enterprise Value/EBITDA | 15.3x |
| PEG Ratio | 3.5x |
Price to Earnings Ratio vs Peers
How does QSR's PE Ratio compare to its peers?
| QSR PE Ratio vs Peers |
|---|
| Company | PE | Estimated Growth | Market Cap |
|---|---|---|---|
| Peer Average | 23.8x | ||
YUM Yum! Brands | 22.8x | 9.5% | US$33.8b |
YUMC Yum China Holdings | 26.5x | 27.4% | US$20.2b |
DRI Darden Restaurants | 16x | 5.3% | US$15.3b |
DPZ Domino's Pizza | 29.6x | 11.3% | US$13.9b |
QSR Restaurant Brands International | 22.2x | 6.4% | US$26.8b |
Price-To-Earnings vs Peers: QSR is good value based on its Price-To-Earnings Ratio (22.2x) compared to the peer average (23.8x).
Price to Earnings Ratio vs Industry
How does QSR's PE Ratio compare vs other companies in the US Hospitality Industry?
Price-To-Earnings vs Industry: QSR is expensive based on its Price-To-Earnings Ratio (22.2x) compared to the US Hospitality industry average (18.1x)
Price to Earnings Ratio vs Fair Ratio
What is QSR's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.
| Fair Ratio | |
|---|---|
| Current PE Ratio | 22.2x |
| Fair PE Ratio | 35.7x |
Price-To-Earnings vs Fair Ratio: QSR is good value based on its Price-To-Earnings Ratio (22.2x) compared to the estimated Fair Price-To-Earnings Ratio (35.7x).
Share Price vs Fair Value
What is the Fair Price of QSR when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.
Below Fair Value: QSR ($59.59) is trading below our estimate of fair value ($72.13)
Significantly Below Fair Value: QSR is trading below fair value, but not by a significant amount.
Analyst Price Targets
What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?
Analyst Forecast: Target price is less than 20% higher than the current share price.
Discover undervalued companies
Future Growth
How is Restaurant Brands International forecast to perform in the next 1 to 3 years based on estimates from 24 analysts?
Future Growth Score
2/6Future Growth Score 2/6
Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE
6.4%
Forecasted annual earnings growth
Earnings and Revenue Growth Forecasts
Analyst Future Growth Forecasts
Earnings vs Savings Rate: QSR's forecast earnings growth (6.4% per year) is above the savings rate (1.9%).
Earnings vs Market: QSR's earnings (6.4% per year) are forecast to grow slower than the US market (12.9% per year).
High Growth Earnings: QSR's earnings are forecast to grow, but not significantly.
Revenue vs Market: QSR's revenue (5% per year) is forecast to grow slower than the US market (7.9% per year).
High Growth Revenue: QSR's revenue (5% per year) is forecast to grow slower than 20% per year.
Earnings per Share Growth Forecasts
Future Return on Equity
Future ROE: QSR's Return on Equity is forecast to be very high in 3 years time (91.7%).
Discover growth companies
Past Performance
How has Restaurant Brands International performed over the past 5 years?
Past Performance Score
4/6Past Performance Score 4/6
Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE
6.6%
Historical annual earnings growth
Earnings and Revenue History
Quality Earnings: QSR has high quality earnings.
Growing Profit Margin: QSR's current net profit margins (13.4%) are higher than last year (12.5%).
Past Earnings Growth Analysis
Earnings Trend: QSR's earnings have grown by 6.6% per year over the past 5 years.
Accelerating Growth: QSR's earnings growth over the past year (21.5%) exceeds its 5-year average (6.6% per year).
Earnings vs Industry: QSR earnings growth over the past year (21.5%) underperformed the Hospitality industry 52.6%.
Return on Equity
High ROE: Whilst QSR's Return on Equity (30.88%) is high, this metric is skewed due to their high level of debt.
Discover strong past performing companies
Financial Health
How is Restaurant Brands International's financial position?
Financial Health Score
1/6Financial Health Score 1/6
Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage
Financial Position Analysis
Short Term Liabilities: QSR's short term assets ($1.6B) do not cover its short term liabilities ($1.8B).
Long Term Liabilities: QSR's short term assets ($1.6B) do not cover its long term liabilities ($17.1B).
Debt to Equity History and Analysis
Debt Level: QSR's net debt to equity ratio (310.1%) is considered high.
Reducing Debt: QSR's debt to equity ratio has increased from 158.5% to 331.5% over the past 5 years.
Debt Coverage: QSR's debt is not well covered by operating cash flow (12.7%).
Interest Coverage: QSR's interest payments on its debt are well covered by EBIT (3.9x coverage).
Balance Sheet
Discover healthy companies
Dividend
What is Restaurant Brands International current dividend yield, its reliability and sustainability?
Dividend Score
3/6Dividend Score 3/6
Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Cash Flow Coverage
3.62%
Current Dividend Yield
Upcoming Dividend Payment
Dividend Yield vs Market
Notable Dividend: QSR's dividend (3.62%) is higher than the bottom 25% of dividend payers in the US market (1.52%).
High Dividend: QSR's dividend (3.62%) is low compared to the top 25% of dividend payers in the US market (4.09%).
Stability and Growth of Payments
Stable Dividend: Whilst dividend payments have been stable, QSR has been paying a dividend for less than 10 years.
Growing Dividend: QSR's dividend payments have increased, but the company has only paid a dividend for 7 years.
Earnings Payout to Shareholders
Earnings Coverage: At its current payout ratio (81.1%), QSR's payments are covered by earnings.
Cash Payout to Shareholders
Cash Flow Coverage: With its reasonable cash payout ratio (62.1%), QSR's dividend payments are covered by cash flows.
Discover strong dividend paying companies
Management
How experienced are the management team and are they aligned to shareholders interests?
3.6yrs
Average management tenure
CEO
Jos Cil (52 yo)
3.58yrs
Tenure
US$13,968,788
Compensation
Mr. Jose E. Cil, also known as Jos, has been the Chief Executive Officer at Restaurant Brands International Inc., a General Partner of Restaurant Brands International Limited Partnership since January 23,...
CEO Compensation Analysis
Compensation vs Market: Jos's total compensation ($USD13.97M) is about average for companies of similar size in the US market ($USD12.96M).
Compensation vs Earnings: Jos's compensation has been consistent with company performance over the past year.
Leadership Team
Experienced Management: QSR's management team is considered experienced (3.6 years average tenure).
Board Members
Experienced Board: QSR's board of directors are considered experienced (3.9 years average tenure).
Ownership
Who are the major shareholders and have insiders been buying or selling?
Insider Trading Volume
Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.
Recent Insider Transactions
Ownership Breakdown
Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.
Top Shareholders
Company Information
Restaurant Brands International Inc.'s employee growth, exchange listings and data sources
Key Information
- Name: Restaurant Brands International Inc.
- Ticker: QSR
- Exchange: NYSE
- Founded: 1954
- Industry: Restaurants
- Sector: Consumer Services
- Implied Market Cap: US$26.762b
- Market Cap: US$18.222b
- Shares outstanding: 449.11m
- Website: https://www.rbi.com
Number of Employees
Location
- Restaurant Brands International Inc.
- 130 King Street West
- Suite 300
- Toronto
- Ontario
- M5X 1E1
- Canada
Listings
Company Analysis and Financial Data Status
| Data | Last Updated (UTC time) |
|---|---|
| Company Analysis | 2022/08/07 00:00 |
| End of Day Share Price | 2022/08/05 00:00 |
| Earnings | 2022/06/30 |
| Annual Earnings | 2021/12/31 |
Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.