There’s no doubt that Canadian restaurant chain Tim Horton’s (TSE:QSR) (NYSE:QSR) has breakfast in the palm of its hand. When you specialize in donuts and coffee, you can’t help but win the crowd who wants a sugar rush before getting to work. But new reports note that Tim’s is looking to expand its menu, and investors aren’t exactly displeased. Tim Horton’s shares are up fractionally in Tuesday morning’s trading on the news.
Tim’s collection of breakfast offerings has done well over the years, and now, it wants to take a stab at the lunchtime market and beyond. To do that, it’s rolling out a new pizza dish to catch some attention in the late morning and early afternoon hours.
The process of developing such a dish took a lot of research, reports noted, as Tim’s chefs looked for the right combinations of oils, cheeses, and other points to make what they believe will be a choice flatbread pizza. Releasing this week, the new pizzas will include plain cheese, a standard pepperoni, a chicken Parmesan, and what it calls “bacon everything.”
A Market with a Lot of Potential
It was not lost on Tim’s staffers that they were missing an opportunity to be a lunch, dinner, or even late-night snack option, though donuts at midnight will certainly do as well as a bagel would. Given that pizza is actually number six on the most frequently ordered food items in Canada, that’s a market with a lot of potential indeed. Will shoppers trust a donut shop for pizza? That’s anyone’s guess.
However, Tim Horton’s is also looking to improve operations with new to-go coffee lids made of biodegradable fibers and a new promotional pack of hockey cards, the Tim Hortons Greatest Duos line. Some might have a problem with a donut shop serving pizza, but with all these draws going on at once, it’s a safe bet Tim Horton’s won’t lose customers over this.
Is QSR Stock a Good Buy?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on QSR stock based on 15 Buys, six Holds, and one Sell assigned in the past three months, as indicated by the graphic below. After a 9.79% rally in its share price over the past year, the average QSR price target of C$115.40 per share implies 18.55% upside potential.
