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On Monday, Stifel analysts maintained their "Hold" rating on Restaurant Brands International (NYSE:QSR) stock, alongside a steady price target of $68.00. According to InvestingPro data, the stock currently trades near its 52-week low of $59.67, with a P/E ratio of 16.04 and a notable dividend yield of 3.62%. The firm’s analysts commented on the company’s performance since the acquisition of Popeyes in March 2017 for $1.8 billion, noting that EBITDA growth has been modest, at just under 4% annually. Recent InvestingPro data shows current EBITDA at $2.49 billion, with impressive revenue growth of 15.08% over the last twelve months. This growth has been affected by intermittent challenges at Tim Hortons (Tims) and Burger King (BK), which have impeded the expected growth trajectory.
The analysts at Stifel also discussed a potential scenario for the company’s valuation. They suggested that based on a sum-of-the-parts analysis, Restaurant Brands International shares could potentially reach a value of $80 if the company were to decide on a demerger. However, they have assigned a low probability to this "bull case" scenario.
Despite the potential for a higher valuation under different circumstances, the Stifel team has chosen to uphold their "Hold" rating with a price target of $68 due to the low likelihood they attribute to the demerger event. They believe, however, that this possibility is worth considering, particularly in light of Restaurant Brands International’s past performance and the impact of the challenges faced by its subsidiaries.
Restaurant Brands International, the parent company of popular fast-food chains such as Popeyes, Tim Hortons, and Burger King, has experienced a period of relatively muted growth in EBITDA since the end of 2017. While Stifel maintains its current stance, InvestingPro’s Fair Value analysis suggests the stock may be undervalued at current levels. For detailed insights into QSR’s valuation and growth prospects, including 10 additional ProTips and comprehensive financial metrics, investors can access the full Pro Research Report, available exclusively to InvestingPro subscribers.
In other recent news, Restaurant Brands International has been upgraded from Neutral to Buy by Guggenheim analyst Gregory Francfort, despite a lowered price target of $71, down from $74. Francfort also revised the earnings per share estimates for the company to $3.63 for 2025 and $3.85 for 2026, citing recent pressures on the stock. The analyst highlighted the potential for market share gains internationally due to strategic improvements led by Chairman Patrick Doyle.
In parallel, Bernstein, a market analysis firm, has released a report on the U.S. Restaurants sector, suggesting that the recent devaluation presents attractive investment opportunities. Among the companies highlighted for their value propositions were Chipotle Mexican Grill (NYSE:CMG) and Wingstop (NASDAQ:WING). The firm also anticipates that an improving traffic environment could bolster Restaurant Brands International’s Burger King in their turnaround efforts.
These developments come amid a challenging environment for the restaurant industry, with same-store sales witnessing a year-on-year decline of 1.0%. Despite the downturn, analysts from Bernstein maintain a positive outlook, suggesting that the sector may have weathered the worst of the decline. The recent developments underscore the ongoing strategic efforts by Restaurant Brands International to navigate a complex market landscape.
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