Restaurant Brands International
QSR
$74.81
+0.94%
Restaurant Brands International is one of the world's largest quick-service restaurant franchisors, operating a portfolio of four global banners — Burger King, Tim Hortons, Popeyes, and Firehouse Subs — across more than 33,000 restaurants in over 120 markets, generating roughly $47 billion in system sales. The company is best understood as a capital-light franchisor and brand-management platform rather than a restaurant operator: the bulk of revenue comes from franchise royalties, property fees, Tim Hortons supply-chain sales, and advertising contributions, which gives it structurally high margins and asset-light cash generation. The current investor debate centers on the durability of Burger King's roughly $700 million 'Reclaim the Flame' turnaround, which has delivered strong same-store sales growth and is now viewed as the primary growth engine, against a visible slowdown at Tim Hortons, which remains the largest revenue segment and a key swing factor for consolidated results. Sentiment is further shaped by the stock's defensive, low-beta profile, a dividend yield near 4.9%, and a valuation that screens at a discount to franchisor peers following Yum Brands' Pizza Hut divestiture, which established a fresh benchmark for how the market values franchise-heavy restaurant assets.…
QSR
Restaurant Brands International
$74.81
Related headlines
Investment Opinion: Should I buy QSR Today?
Rating: Buy. Our thesis is that QSR offers a compelling risk/reward proposition, trading at a discount to peers with a 4.9% dividend yield and a clear growth catalyst in the Burger King turnaround, supported by a unanimous buy rating from analysts and a $86 average target price (15% upside).
Supporting Evidence: The stock trades at a forward P/E of 16.9x, below the industry average, and an EV/EBITDA of 15.7x, which is attractive for a franchisor with high margins. Revenue growth of 4.56% year-over-year is modest but steady, and the operating margin of 23.7% demonstrates strong profitability. Free cash flow of $1.57 billion comfortably covers the dividend, and the 4.86% yield is well above the market average. Analyst targets imply 15% upside, and the low target of $78 is still above the current price, indicating a favorable risk/reward.
Risks & Conditions: The biggest risks are the Tim Hortons slowdown, high leverage, and potential dividend sustainability. This Buy rating would be downgraded to Hold if Tim Hortons' same-store sales turn negative or if the payout ratio remains above 100% for multiple quarters. Conversely, an upgrade to Strong Buy would require evidence of accelerating revenue growth above 6% and a reduction in debt. The stock appears undervalued relative to its history and peers, given its defensive characteristics and growth prospects.
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QSR 12-Month Price Forecast
We are bullish on QSR with medium confidence, based on the successful Burger King turnaround, attractive dividend yield, and discounted valuation relative to peers. The analyst consensus is overwhelmingly positive, and the stock's defensive profile makes it suitable for uncertain markets. However, the Tim Hortons slowdown and high leverage are concerns that could limit upside. We would upgrade to high confidence if Tim Hortons shows clear signs of stabilization, and downgrade to neutral if same-store sales decline further.
Wall Street consensus
Most Wall Street analysts maintain a constructive view on Restaurant Brands International's 12-month outlook, with a consensus price target around $86.00 and implied upside of +15.0% versus the current price.
Average Target
$86.00
0 analysts
Implied Upside
+15.0%
vs. current price
Analyst Count
—
covering this stock
Price Range
$78 - $104
Analyst target range
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Bulls vs Bears: QSR Investment Factors
The bull case for QSR rests on the successful Burger King turnaround, a defensive low-beta profile, and an attractive dividend yield, supported by a unanimous buy rating from analysts with a $86 average target. However, the bear case highlights the Tim Hortons slowdown, high leverage, and relative underperformance versus the market. Currently, the bull evidence appears stronger given the analyst consensus and the tangible results from the Burger King initiative, but the most critical tension is the sustainability of Tim Hortons' performance—if it stabilizes, the stock could re-rate higher; if it deteriorates further, it could drag down overall results despite Burger King's success.
Bullish
- Burger King turnaround gaining traction: Burger King's 'Reclaim the Flame' initiative, backed by roughly $700 million of investment, is delivering results, with Q1 2026 same-store sales growth of 5.8% cited in recent coverage. This is the primary growth engine for the company and validates management's turnaround strategy.
- Analyst consensus buy with 15% upside: All 24 analysts covering QSR rate it a buy (mean recommendation 1.89), with an average target price of $86.00, implying 15.0% upside from the current $74.81. The low target of $78.00 is still above the current price, suggesting broad-based confidence.
- Attractive dividend yield near 4.9%: QSR offers a dividend yield of 4.86%, well above the S&P 500 average, supported by $1.57 billion in trailing free cash flow. This provides a strong income component and downside support for the stock.
- Defensive low-beta profile: With a beta of 0.535, QSR is significantly less volatile than the broader market, making it an attractive defensive holding in uncertain macro environments. This low correlation is evidenced by its relative strength holding up better than the market during recent downturns.
Bearish
- Tim Hortons slowdown threatens growth: Tim Hortons, the largest revenue segment, is experiencing a visible slowdown, which remains a key risk according to recent news. As a significant swing factor for consolidated results, any further deterioration could offset Burger King's gains.
- High debt burden constrains flexibility: QSR carries a debt-to-equity ratio of 4.84, indicating a highly leveraged balance sheet. This limits financial flexibility and increases sensitivity to interest rate changes, with interest expense of $170 million in Q2 2026 alone.
- Earnings quality concerns: The trailing P/E of 28.9x is elevated relative to the forward P/E of 16.9x, implying the market expects significant earnings growth. However, the current EPS of $0.034 is very low, and the payout ratio of 142.8% suggests the dividend may not be fully covered by earnings.
- Relative underperformance vs. market: QSR has underperformed the S&P 500 across multiple time frames, with a relative strength of -4.57 over one year and -11.96 over six months. The stock is down 4.48% over six months while the market is up 7.48%, indicating waning investor confidence.
QSR Technical Analysis
Beta
0.54
0.54x market volatility
Max Drawdown
-15.0%
Largest decline past year
52-Week Range
$65-$82
Price range past year
Annual Return
+11.0%
Cumulative gain past year
| Period | QSR Return | S&P 500 |
|---|---|---|
| 1m | -0.2% | +0.2% |
| 3m | -0.3% | +2.9% |
| 6m | -4.5% | +8.4% |
| 1y | +11.0% | +14.9% |
| ytd | +10.3% | +11.9% |
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QSR Fundamental Analysis
Quarterly Revenue
$2.5B
2026-06
Revenue YoY Growth
+4.6%
YoY Comparison
Gross Margin
34.5%
Latest Quarter
Free Cash Flow
$1.6B
Last 12 Months
Revenue & Net Income Trends (2 Years)
Revenue Breakdown
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Valuation Analysis: Is QSR Overvalued?
PE
28.9x
Latest Quarter
vs. Historical
High-End
5-Year PE Range 8x~25x
vs. Industry Avg
N/A
Industry PE ~N/A*
EV/EBITDA
15.7x
Enterprise Value Multiple
Investment Risk Disclosure
Financial & Operational Risks: QSR's high debt-to-equity ratio of 4.84 and interest expense of $170 million in Q2 2026 pose significant financial risk, especially in a rising rate environment. The company's current ratio of 0.98 indicates potential liquidity constraints, and the payout ratio of 142.8% suggests the dividend may not be fully covered by earnings, raising concerns about sustainability. Additionally, revenue growth of 4.56% year-over-year is modest, and any slowdown in same-store sales could pressure margins further.
Market & Competitive Risks: QSR faces intense competition in the quick-service restaurant space, with peers like McDonald's investing in marketing and digital initiatives to drive traffic. The stock's beta of 0.535 indicates lower market correlation, but sector rotation away from consumer cyclical names could still impact performance. Recent news highlights Tim Hortons' slowdown as a key risk, and the valuation, while at a discount to peers, could compress if growth disappoints. The Yum Brands Pizza Hut divestiture sets a new benchmark, but if QSR fails to close the valuation gap, the stock may remain range-bound.
Worst-Case Scenario: A worst-case scenario would involve a significant deterioration in Tim Hortons' performance coupled with a Burger King turnaround stall, leading to declining same-store sales and earnings misses. This could trigger a sell-off toward the 52-week low of $64.52, representing a 13.8% decline from the current price of $74.81. Additionally, if interest rates rise further, the high debt load could exacerbate the downside, potentially pushing the stock below the 52-week low to the analyst low target of $78.00 (which is above current, so not applicable) – actually, the analyst low target is $78, which is above current, so the downside is to the 52-week low of $64.52, a 13.8% drop. In a more severe scenario, if the dividend is cut, the stock could fall further, but the 52-week low provides a realistic floor.
FAQ
The key risks include: 1) Tim Hortons' slowdown, which could drag down overall results; 2) high leverage with a debt-to-equity ratio of 4.84, increasing sensitivity to interest rates; 3) dividend sustainability, as the payout ratio of 142.8% exceeds earnings; and 4) competitive pressures from McDonald's and other fast-food chains. These risks are ranked by severity, with Tim Hortons being the most immediate concern.
Our 12-month forecast has a base case (50% probability) of $80-90, aligned with the analyst average target of $86, assuming steady Burger King growth and Tim Hortons stabilization. The bull case (30% probability) targets $90-104, driven by accelerating same-store sales and multiple expansion. The bear case (20% probability) targets $64.52-78, if Tim Hortons deteriorates and earnings miss. The most likely scenario is the base case, with a key assumption of mid-single-digit same-store sales growth at Burger King.
QSR appears undervalued relative to its peers, trading at a forward P/E of 16.9x and EV/EBITDA of 15.7x, which is at a discount to franchisor peers like Yum Brands. The trailing P/E of 28.9x is elevated but reflects expected earnings growth. The dividend yield of 4.86% is attractive, and the analyst average target of $86 implies 15% upside. The market may be pricing in concerns about Tim Hortons, but the discount seems unjustified given the Burger King turnaround.
QSR appears to be a good buy for income-oriented investors, given its 4.86% dividend yield and unanimous buy rating from analysts with a $86 average target (15% upside). The stock trades at a forward P/E of 16.9x, below peers, and offers a defensive low-beta profile. However, the Tim Hortons slowdown and high debt-to-equity ratio of 4.84 are notable risks. Overall, it is a good buy for those seeking dividend income and moderate growth, but with a medium risk tolerance.
QSR is more suitable for long-term investment, given its defensive low-beta profile (0.535), stable dividend yield of 4.86%, and consistent free cash flow generation. The company's growth stage is mature, and earnings visibility is moderate, making it less ideal for short-term trading. We recommend a minimum holding period of 2-3 years to fully realize the benefits of the dividend and potential turnaround.
