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Restaurant Brands International (QSR)
NYSE:QSR
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Restaurant Brands International
(NYSE:QSR)
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Rating:69Neutral
Price Target:
$73.00
▲(8.94% Upside)
Restaurant Brands International's overall score reflects strong financial performance and strategic growth in key segments, particularly Tim Hortons and International. While valuation and technical indicators are moderately positive, challenges in maintaining profitability and managing costs, especially commodity inflation, are notable risks. The company's strategic initiatives and dividend yield enhance its attractiveness, but careful management of financial and operational challenges is crucial for sustained growth.
Positive Factors
Revenue Growth
Consistent sales growth across key segments like Tim Hortons and International indicates strong market demand and effective strategies, supporting long-term revenue expansion.
International Expansion
The expansion into Mexico with over 300 new Popeyes restaurants enhances global footprint, diversifies revenue streams, and strengthens competitive position in the fast-food industry.
Operational Efficiency
High EBIT margin demonstrates effective cost management and operational efficiency, which can sustain profitability and provide a buffer against economic fluctuations.
Negative Factors
High Leverage
High leverage can limit financial flexibility and increase risk during economic downturns, potentially impacting long-term financial stability and growth opportunities.
Profit Margin Pressure
Declining profit margins indicate pressure on profitability, which could affect the company's ability to reinvest in growth and maintain competitive pricing strategies.
Commodity Cost Inflation
Rising commodity costs can erode margins and necessitate price increases, potentially affecting demand and profitability if not managed effectively over time.
Restaurant Brands International (QSR) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$30.48B
Dividend Yield3.7%
Average Volume (3M)2.53M
Price to Earnings (P/E)25.1
Beta (1Y)0.35
Revenue Growth21.80%
EPS Growth-34.35%
CountryUS
Employees37,600
SectorConsumer Cyclical
Sector Strength84
IndustryRestaurants
Share Statistics
EPS (TTM)1.03
Shares Outstanding327,801,850
10 Day Avg. Volume1,689,958
30 Day Avg. Volume2,530,127
Financial Highlights & Ratios
PEG Ratio-1.28
Price to Book (P/B)6.69
Price to Sales (P/S)2.47
P/FCF Ratio15.97
Enterprise Value/Market Cap1.54
Enterprise Value/Revenue5.07
Enterprise Value/Gross Profit63.18
Enterprise Value/Ebitda22.80
Forecast
1Y Price Target
$76.29Price Target Upside13.85% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering20
Restaurant Brands International Business Overview & Revenue Model
Company DescriptionRestaurant 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. It is also involved in owning and franchising BK, a fast food hamburger restaurant chain, which offers flame-grilled hamburgers, chicken and other specialty sandwiches, french fries, soft drinks, and other food items; and PLK quick service restaurants that provide Louisiana style fried chicken, chicken tenders, fried shrimp and other seafood, red beans and rice, and other regional items. In addition, the company owns and franchises FHS restaurants quick service restaurants that offer subs, soft drinks, and local specialties. As of February 15, 2022, the company had approximately 29,000 restaurants in 100 countries under the Tim Hortons, Burger King, Popeyes, And Firehouse Subs brands. Restaurant Brands International Inc. was founded in 1954 and is headquartered in Toronto, Canada.
How the Company Makes MoneyRestaurant Brands International generates revenue primarily through its franchising model, which allows the company to earn significant fees from franchisees based on sales and royalties. Additionally, it makes money from company-operated restaurants, where it retains a larger portion of revenues. The company also benefits from supply chain efficiencies and product distribution, which contribute to its earnings. Strategic partnerships, such as collaborations with food suppliers and technology firms, enhance operational capabilities and customer engagement, further driving revenue growth.
Restaurant Brands International Key Performance Indicators (KPIs)
Any
Organic Revenue Growth
Measures revenue growth from existing operations, excluding acquisitions or currency effects, to assess the company's true growth momentum and operational effectiveness.
Measures revenue growth from existing operations, excluding acquisitions or currency effects, to assess the company's true growth momentum and operational effectiveness.
Data provided by:
Main Street Data
Main Street DataRestaurant Brands International Earnings Call Summary
Earnings Call Date:Oct 30, 2025
(Q2-2025)
| % Change Since: |
Next Earnings Date:Feb 17, 2026
Earnings Call Sentiment Neutral
The earnings call reflected a strong performance in key areas such as Tim Hortons and International segments, with solid sales growth and successful marketing initiatives. However, challenges like increased bad debt expenses and commodity cost inflation presented hurdles. The turnaround in Burger King China and progress in system-wide sales show potential for continued growth.Q2-2025 Updates
Positive Updates
Tim Hortons' Strong Performance
Tim Hortons posted its 17th consecutive quarter of positive comparable sales in Canada with a 3.6% increase. The growth was supported by a well-executed marketing calendar and operational improvements.
International Segment Growth
The International segment delivered nearly 10% system-wide sales growth, with particularly strong performance in markets like the UK, Spain, Australia, and Germany.
System-Wide Sales Growth
Restaurant Brands International reported a system-wide sales growth of 5.3% in Q2, driven by net restaurant growth of 2.9% and comp sales acceleration to 2.4% year-over-year.
Record Fundraising Campaigns
Tim Hortons raised a record-breaking $23 million during Smile Cookie Week and $13 million for the Tim Hortons Foundation camps during Camp Day.
Positive Turnaround in Burger King China
Burger King China saw comparable sales turn positive in Q2, with improved unit economics, marking a significant turnaround.
Negative Updates
Bad Debt Expenses
The company recorded $9 million in bad debt expenses in Q2, a significant increase from a net recovery of $6 million in the prior year.
Popeyes U.S. Comparable Sales Decline
Popeyes in the U.S. experienced a 0.9% decline in comparable sales despite system-wide sales growth of 1.9%.
Commodity Cost Inflation
The company faced significant cost inflation, particularly in beef prices which were up high teens year-over-year, impacting the cost structure.
Company Guidance
During the Restaurant Brands International (RBI) Second Quarter 2025 Earnings Conference Call, the company provided several key performance indicators and forward-looking guidance. For Q2 2025, RBI reported a year-over-year comparable sales growth of 2.4%, with net restaurant growth at 2.9%, leading to system-wide sales growth of 5.3%. This contributed to an organic adjusted operating income (AOI) growth of 5.7%. Tim Hortons and the International business segments, which together account for nearly 70% of RBI’s adjusted operating income, were highlighted as strong performers. Tim Hortons Canada achieved its 17th consecutive quarter of positive comparable sales, accelerating to 3.6%, while the International segment saw nearly 10% system-wide sales growth with a 5.4% increase in net restaurants and 4.2% in comparable sales. Burger King U.S. reported a modest 1.5% increase in comparable sales, outperforming the burger QSR segment. Despite a dynamic consumer environment, RBI is confident in achieving at least 8% organic AOI growth in 2025, supported by disciplined cost management and strategic investments. The company also noted progress in refranchising efforts and the repositioning of Burger King China, aiming to simplify operations and enhance long-term growth.Restaurant Brands International Financial Statement Overview
Summary
Restaurant Brands International demonstrates solid revenue growth and operational efficiency, but faces challenges with declining net profit margins and high leverage. The company shows positive cash flow trends, which is a strength, but the high debt levels could pose risks if not managed carefully. Overall, the financial health is stable with room for improvement in profitability and leverage management.Income Statement
Restaurant Brands International shows a steady revenue growth rate of 3.76% in the TTM, indicating positive momentum. However, the net profit margin has decreased from 12.15% in 2024 to 9.43% in the TTM, suggesting some pressure on profitability. The gross profit margin remains stable at around 37.6%, and the EBIT margin is strong at 24.07%, reflecting efficient operational management.75
Positive
Balance Sheet
The company has a high debt-to-equity ratio of 4.82 in the TTM, which poses a risk due to significant leverage. However, the return on equity is robust at 26.89%, indicating effective use of equity to generate profits. The equity ratio is relatively low, suggesting a heavy reliance on debt financing.60
Neutral
Cash Flow
Free cash flow growth is positive at 9.72% in the TTM, showing improvement in cash generation. The operating cash flow to net income ratio is 0.58, indicating moderate cash conversion efficiency. The free cash flow to net income ratio is strong at 0.85, suggesting good cash flow relative to earnings.70
Positive
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 9.26B | 8.41B | 7.02B | 6.50B | 5.74B | 4.97B |
| Gross Profit | 744.00M | 3.02B | 2.80B | 2.60B | 2.37B | 1.97B |
| EBITDA | 2.06B | 2.66B | 2.24B | 2.07B | 2.04B | 1.50B |
| Net Income | 922.00M | 1.02B | 1.19B | 1.01B | 838.00M | 486.00M |
Balance Sheet | ||||||
| Total Assets | 25.67B | 24.63B | 23.39B | 22.75B | 23.25B | 22.78B |
| Cash, Cash Equivalents and Short-Term Investments | 1.21B | 1.33B | 1.14B | 1.18B | 1.09B | 1.56B |
| Total Debt | 1.96B | 15.96B | 14.52B | 14.49B | 14.62B | 14.12B |
| Total Liabilities | 20.50B | 19.79B | 18.66B | 18.48B | 19.39B | 19.06B |
| Stockholders Equity | 3.38B | 3.11B | 2.87B | 2.50B | 2.24B | 2.17B |
Cash Flow | ||||||
| Free Cash Flow | 1.40B | 1.30B | 1.20B | 1.39B | 1.62B | 804.00M |
| Operating Cash Flow | 1.64B | 1.50B | 1.32B | 1.49B | 1.73B | 921.00M |
| Investing Cash Flow | -359.00M | -660.00M | 11.00M | -64.00M | -1.10B | -79.00M |
| Financing Cash Flow | -260.00M | -625.00M | -1.37B | -1.31B | -1.09B | -821.00M |
Restaurant Brands International Technical Analysis
Positive
67.01
Price Trends
64.91
Positive
65.75
Positive
65.00
Positive
Market Momentum
0.42
Positive
52.39
Neutral
24.38
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For QSR, the sentiment is Positive. The current price of 67.01 is below the 20-day moving average (MA) of 67.49, above the 50-day MA of 64.91, and above the 200-day MA of 65.00, indicating a neutral trend. The MACD of 0.42 indicates Positive momentum. The RSI at 52.39 is Neutral, neither overbought nor oversold. The STOCH value of 24.38 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for QSR.
Restaurant Brands International Risk Analysis
Restaurant Brands International disclosed 31 risk factors in its most recent earnings report. Restaurant Brands International reported the most risks in the "Legal & Regulatory" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Restaurant Brands International Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
| ― | C$519.32M | 16.57 | 10.14% | 5.96% | -0.26% | -2.48% | |
| ― | C$43.15B | 25.16 | 24.42% | 3.68% | 25.29% | -22.90% | |
| ― | $30.48B | 25.05 | 27.00% | 3.70% | 21.80% | -34.35% | |
| ― | $775.46M | 24.29 | 3.64% | 3.66% | 1.38% | -64.10% | |
| ― | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% | |
| ― | C$8.37M | -3.71 | ― | ― | -2.40% | 9.13% |
* Consumer Cyclical Sector Average
QSR
Restaurant Brands International
67.01
0.00
0.00%
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Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.