Restaurant Brands International (QSR) is a Canadian-American multinational fast-food company. The Toronto-based company operates through three segments: Burger King, Popeyes, and Tim Hortons.
Restaurant Brands International reported revenue of $1.5 billion for Q3 2021 versus $1.3 billion in the same quarter last year, but fell short of the consensus estimate of $1.52 million. It posted adjusted diluted EPS of $0.76, which rose from $0.68 in the same quarter last year and beat the consensus estimate of $0.74.
The company recently distributed a quarterly dividend of $0.53 per share. QSR stock offers a dividend yield of 3.36%, compared to the sector average of 0.45%
Let’s take a look at the risk factors for Restaurant Brands International with the help of TipRanks Risk Analysis tool.
Risk Factors
According to the new TipRanks Risk Factors tool, Restaurant Brands International main risk categories are Legal and Regulatory, Production, and Macro & Political, each representing 20% of the total 30 risks identified for the stock. Ability to Sell and Finance & Corporate are the next two major risk categories, at 17% and 13% each of the total risks, respectively. Restaurant Brands International has recently added one new Macro and Political risk factor.
In the new risk, Restaurant Brands International informs investors that climate change could have a negative impact on the availability and pricing of agricultural products like beef, coffee beans, dairy, and chicken used by the company. In addition, the expected rise in natural disasters and other harsh weather conditions due to climate change is also believed to potentially negatively impact the supply chain and consumer demand.
In an updated Macro and Political risk factor, QSR informs investors that climate change might give rise to new legal and regulatory requirements, which in turn may increase costs noticeably. Furthermore, non-fulfilment of the goals or failure to act according to the regulatory requirements concerning climate change may damage the reputation and brand value, creating a negative effect on the business.
The Legal and Regulatory risk factor’s sector average is 24%, compared to Restaurant Brands International’s 20%. On the other hand, the Production risk factor’s sector average is 17%, lower than QSR’s 20%. Similarly, the Macro & Political risk factor’s sector average is 14%, again lower than QSR’s 20%.
Restaurant Brands International’s stock has declined about 4% over the past year.
Analysts’ Take
Last week, Morgan Stanley analyst John Glass reiterated a Sell rating on Restaurant Brands International stock, lowering the price target to $60 from $66. Glass’s reduced price target suggests 6.81% upside.
Consensus among analysts is a Moderate Buy based on 10 Buys, 11 Holds and 2 Sells. The average Restaurant Brands International price target of $65.99 implies 17.48% upside potential to current levels.
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