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On Friday, KeyBanc Capital Markets reaffirmed its Overweight rating on shares of Restaurant Brands International (NYSE:QSR), maintaining a $78.00 price target. The affirmation comes despite Restaurant Brands reporting first-quarter earnings that fell short of market expectations. According to InvestingPro data, the stock currently trades at $67.53, with analyst targets ranging from $56 to $93, reflecting mixed sentiment in the market. The company maintains strong dividend credentials, having raised its dividend for 10 consecutive years.
According to KeyBanc’s analysis, Restaurant Brands is still on track to achieve adjusted operating income growth of 8% or more by 2025, anticipating improvements after a weaker first quarter. The company’s growth expectations are supported by general and administrative (G&A) cost savings announced on the same day.
Restaurant Brands now projects a return to over 5% net unit growth toward the end of its long-term algorithm period, although growth for this year is forecasted to be slightly below the previous year’s 3.4%. KeyBanc’s stance remains positive, citing the stock’s current valuation at approximately 16 times their estimated 2026 earnings per share as undervaluing the company’s long-term growth prospects, including high single-digit percentage adjusted operating income growth. This assessment aligns with InvestingPro’s Fair Value analysis, which suggests the stock is currently undervalued. The company shows strong fundamentals with a 22.4% revenue growth and maintains a healthy 3.67% dividend yield.
In light of the first-quarter performance and a more conservative unit growth outlook, KeyBanc has adjusted its 2025 earnings per share estimate for Restaurant Brands. The adjustments account for the initial shortfall and are balanced by the anticipated G&A efficiency gains.
Restaurant Brands International’s commitment to long-term growth and cost-saving measures appears to align with KeyBanc’s analysis, providing the basis for maintaining the Overweight stock rating and $78.00 price target.
In other recent news, Restaurant Brands International has reported mixed results in its first-quarter financial performance for 2025. The company experienced a slight decline in Burger King’s U.S. comparable sales by 1.1%, while Tim Hortons in Canada saw a marginal increase of 0.1%. Meanwhile, Restaurant Brands International has acquired Burger King China for approximately $158 million, aiming to expand its presence in the Chinese market. The company plans to find a new local partner to inject primary capital into the business, while TFI will continue assisting with Burger King’s expansion in Turkey.
In terms of analyst activity, JPMorgan has raised its price target for Restaurant Brands to $80, maintaining an Overweight rating, while Guggenheim increased its target to $77 with a Buy rating, citing strategic valuation expansion. However, TD Cowen has downgraded the stock from Buy to Hold, setting a target of $70 due to potential challenges in the Canadian market and competitive pressures in the fast-food industry. Additionally, Restaurant Brands International has released its annual "Restaurant Brands for Good" report, highlighting its commitment to corporate responsibility and sustainability efforts. The report outlines the company’s progress in sourcing ingredients sustainably, reducing waste, and improving the nutritional value of its menu offerings.
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