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Restaurant Brands International (TSE:QSR)
:QSR
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Restaurant Brnd International
(NYSE:QSR)72Outperform
Positive Factors
Financial Performance
Tim Hortons realized healthy comps led by traffic, contributing to strong franchisee profitability increase.
Growth Strategy
Accelerating remodels, ops improvements, refreshed value messaging, and focus on Whoppers/families planned to combat competitive dynamics.
Negative Factors
Market Competition
There is a lack of confidence in BK's ability to combat peers' chicken-focused menu innovations, which are a structural growth category for quick service.
Restaurant Brnd International (QSR) vs. S&P 500 (SPY)
Market Cap
C$42.81B
Dividend Yield3.57%
Average Volume (3M)774.66K
Price to Earnings (P/E)21.8
Beta (1Y)0.58
Revenue Growth21.63%
EPS Growth-14.75%
CountryCA
Employees9,000
SectorConsumer Cyclical
Sector Strength53
IndustryRestaurants & Bars
Share Statistics
EPS (TTM)4.35
Shares Outstanding324,984,650
10 Day Avg. Volume1,010,539
30 Day Avg. Volume774,664
Financial Highlights & Ratios
PEG Ratio0.42
Price to Book (P/B)N/A
Price to Sales (P/S)3.52
Price to Cash Flow (P/CF)15.40
P/FCF Ratio13.50
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
C$111.24Price Target Upside17.46% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering19
Restaurant Brnd International Business Overview & Revenue Model
Company DescriptionRestaurant Brands International Inc. (RBI) is a leading global fast-food holding company headquartered in Toronto, Canada. It was formed in 2014 through the merger of American fast-food chain Burger King and Canadian coffee shop and restaurant chain Tim Hortons. The company further expanded by acquiring Popeyes Louisiana Kitchen in 2017 and Firehouse Subs in 2021. RBI operates in the quick-service restaurant sector, offering a diverse range of products including burgers, chicken, coffee, and sandwiches through its well-known brands: Burger King, Tim Hortons, Popeyes, and Firehouse Subs.
How the Company Makes MoneyRestaurant Brands International makes money primarily through franchising and direct restaurant operations. The majority of its revenue comes from franchise fees and royalties, which are a percentage of sales from franchise-operated restaurants. This model allows RBI to expand its global presence with relatively low capital expenditure. Additionally, RBI earns revenue from company-operated restaurants, especially in markets where franchising is less prevalent. The company also benefits from strategic partnerships and brand collaborations that enhance its market reach and product offerings. Another significant revenue stream is derived from the supply chain operations, where RBI provides food, packaging, and other products to its restaurants, both franchised and company-owned.
Restaurant Brnd International Financial Statement Overview
Summary
Restaurant Brands International exhibits strong financial performance with robust profitability and revenue growth. Despite high leverage, the efficient use of equity and consistent cash flow generation mitigate risk concerns.Income Statement
Restaurant Brands International demonstrates strong profitability with a high gross profit margin of 36% and a solid EBIT margin of 28.8%. The company shows robust revenue growth, increasing by 19.7% from 2023 to 2024. However, the net profit margin decreased to 12.1% due to a reduction in net income.85
Very Positive
Balance Sheet
The company's balance sheet indicates high leverage with a debt-to-equity ratio of 5.13, suggesting reliance on debt financing. Despite this, the company's equity ratio is relatively low at 12.6%, indicating limited equity financing. The ROE is strong at 32.8%, reflecting efficient use of equity.72
Positive
Cash Flow
Cash flow analysis is positive, with a stable operating cash flow and a free cash flow to net income ratio of 1.28, indicating healthy cash generation relative to earnings. The free cash flow growth rate is moderate at 8.3%, showing consistent cash flow performance.80
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 8.41B | 7.02B | 6.50B | 5.74B | 4.97B | Gross Profit |
| 3.02B | 2.80B | 2.60B | 2.40B | 2.83B | EBIT |
| 2.42B | 2.05B | 1.90B | 1.88B | 1.42B | EBITDA |
| 2.66B | 2.24B | 2.21B | 2.13B | 1.78B | Net Income Common Stockholders |
| 1.02B | 1.19B | 1.48B | 1.25B | 750.00M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 1.33B | 1.14B | 1.18B | 1.09B | 1.56B | Total Assets |
| 24.63B | 23.39B | 22.75B | 23.25B | 22.78B | Total Debt |
| 15.96B | 14.52B | 14.30B | 14.41B | 13.90B | Net Debt |
| 14.62B | 13.38B | 13.13B | 13.33B | 12.35B | Total Liabilities |
| 19.79B | 18.66B | 18.48B | 19.39B | 19.06B | Stockholders Equity |
| 3.11B | 2.87B | 2.50B | 2.24B | 2.17B |
| Cash Flow | Free Cash Flow | |||
| 1.30B | 1.20B | 1.39B | 1.62B | 804.00M | Operating Cash Flow |
| 1.50B | 1.32B | 1.49B | 1.73B | 921.00M | Investing Cash Flow |
| -660.00M | 11.00M | -64.00M | -1.10B | -79.00M | Financing Cash Flow |
| -625.00M | -1.37B | -1.31B | -1.09B | -821.00M |
Restaurant Brnd International Technical Analysis
Positive
94.70
Price Trends
91.12
Positive
93.85
Positive
93.81
Positive
Market Momentum
0.75
Negative
60.20
Neutral
85.79
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:QSR, the sentiment is Positive. The current price of 94.7 is above the 20-day moving average (MA) of 92.16, above the 50-day MA of 91.12, and above the 200-day MA of 93.81, indicating a bullish trend. The MACD of 0.75 indicates Negative momentum. The RSI at 60.20 is Neutral, neither overbought nor oversold. The STOCH value of 85.79 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:QSR.
Restaurant Brnd International Risk Analysis
Restaurant Brnd International disclosed 31 risk factors in its most recent earnings report. Restaurant Brnd 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 Brnd International Peers Comparison
Overall Rating
UnderperformOutperform
Sector (60)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
79 Outperform | 11.56 | 11.37% | 7.20% | 0.64% | 8.65% | ||
76 Outperform | $437.03M | 13.98 | 10.42% | 7.42% | 1.24% | 1.00% | |
72 Outperform | C$42.81B | 21.76 | 32.83% | 3.57% | 21.63% | -14.75% | |
68 Neutral | $1.02B | 43.74 | 3.01% | 2.72% | -0.83% | -77.91% | |
60 Neutral | $13.01B | 10.45 | 0.79% | 3.53% | 1.60% | -22.47% | |
58 Neutral | 34.76 | 4.49% | 8.06% | 1.84% | -80.01% |
* Consumer Cyclical Sector Average
Performance Comparison
TSE:QSR
Restaurant Brnd International
95.60
-9.22
-8.80%
TSE:PZA
Pizza Pizza Royalty
13.54
0.42
3.22%
TSE:MTY
MTY Food Group
44.96
-5.81
-11.44%
TSE:KEG.UN
Keg Royalties Fund
13.98
-0.02
-0.14%
TSE:BPF.UN
Boston Pizza Fund
17.03
2.58
17.85%
Restaurant Brnd International Earnings Call Summary
Earnings Call Date: Feb 12, 2025 | % Change Since: -0.89% | Next Earnings Date: May 6, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted strong performance in several key areas, including Tim Hortons' growth and international expansion. However, challenges persist with Burger King U.S., Firehouse Subs, and geopolitical issues impacting growth. Despite these challenges, the company remains confident in its ability to deliver 8% plus organic AOI growth in 2025.Highlights
Strong Overall System-Wide Sales Growth
In 2024, Restaurant Brands International (RBI) grew system-wide sales by 5.4% and achieved a 9% organic adjusted operating income growth.
Tim Hortons Surpasses $1 Billion in Adjusted Operating Income
Tim Hortons delivered a strong performance in 2024, surpassing $1 billion in AOI for the first time and outperforming major peers in the Canadian market.
International Segment Performance
RBI's international segment closed the year with over 15,600 restaurants and over $18 billion in system-wide sales. In 2024, international comparable sales grew 3.3%.
Franchisee Profitability Improvements
Average four-wall EBITDA for Tim's Canada increased to CAD305,000, and Popeyes U.S. increased to just over $255,000.
Lowlights
Burger King U.S. and Firehouse Subs Challenges
Burger King U.S. remained stable at $205,000 in average four-wall EBITDA, and Firehouse Subs saw a decline to approximately $90,000 due to broader substandard category sale dynamics.
Geopolitical and Market Headwinds
Net restaurant growth of 3.4% was affected by development slowdowns in geopolitically impacted markets and net closures in BK China.
Burger King China Financial Impact
RBI recorded $20 million of net bad debt expenses in Q4 primarily related to Burger King China, impacting potential AOI growth for 2025.
Company Guidance
During the Restaurant Brands International Full-Year Fourth Quarter 2024 Earnings Conference Call, the company highlighted several key metrics and achievements. In 2024, RBI reported a 2.3% growth in comparable sales, a 3.4% increase in net restaurants, and a 5.4% rise in system-wide sales. The company achieved a significant 9% organic adjusted operating income growth. Tim Hortons Canada exceeded expectations with a 4.3% increase in comparable sales, driven by traffic growth and operational improvements, surpassing CAD305,000 in average four-wall EBITDA. Burger King U.S. saw stable average four-wall EBITDA at $205,000, while Popeyes U.S. improved to over $255,000. Firehouse Subs experienced a decline to $90,000 due to category challenges. The company remains optimistic about 2025, targeting another year of 8% plus organic adjusted operating income growth.Restaurant Brnd International Corporate Events
Business Operations and StrategyFinancial Disclosures
Restaurant Brands International Reports Strong 2024 Financial Results
Positive
Feb 12, 2025
Restaurant Brands International Inc. reported its financial results for the full year and fourth quarter of 2024, showcasing a global system-wide sales growth of 5.6% in Q4 and 5.4% for the year. The company’s income from operations grew by 17.9% year-over-year, with a return of approximately $1.0 billion to shareholders in 2024. As part of its strategy, RBI is committed to thoughtful marketing, operational improvements, and modern imaging to drive long-term growth and enhance shareholder value.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
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.