On Thursday, JPMorgan (NYSE:JPM) expressed continued confidence in Restaurant Brands International (NYSE:QSR), a $29.7 billion quick-service restaurant giant currently trading at $66.1, maintaining an Overweight rating and a price target of $80.00. According to InvestingPro analysis, QSR appears undervalued based on its Fair Value calculations. The affirmation follows the company’s fourth-quarter results for the fiscal year 2024, which showcased a stronger performance in the global quick service sector than anticipated. Restaurant Brands International reported a 2.5% increase in global sales, surpassing both JPMorgan’s estimate of 1.6% and the 0.3% growth observed in the third quarter of 2024.
The company’s performance was in line with the improving trends seen at competitors McDonald’s (NYSE:MCD) and Yum Brands, although market results varied. Notably, the United Kingdom (TADAWUL:4280), Australia, and Canada showed more robust results, while France experienced softer sales. Analysts highlighted the resilience of Restaurant Brands International, particularly in Tim Hortons Canada and Burger King International, which delivered comparable sales growth of 2.5% and 4.9%, respectively. These segments account for approximately 65% of the company’s operating income.
The report also provided a positive outlook for the Burger King division in the United States. Despite a modest 1.5% growth, the expectation is for an uptick in performance as the brand continues its extensive remodeling program. By the end of fiscal 2024, 51% of the U.S. system had been remodeled, with a goal to reach 85% by the end of fiscal 2028.
Restaurant Brands International’s latest financial results and the subsequent reaffirmation of JPMorgan’s rating and price target reflect the company’s strategic positioning and potential for continued growth in the competitive quick service restaurant industry. The company maintains a "GOOD" overall financial health score according to InvestingPro analysis, with analyst price targets ranging from $67 to $93.
In other recent news, Restaurant Brands International has been the focus of several analysts. BMO Capital maintained an Outperform rating on the company, with a price target of $86.00, following the company’s announcement of fourth-quarter earnings per share (EPS) of $0.81, surpassing the consensus estimate of $0.78. The firm cited strong international comparable sales and higher profitability at Tim Hortons as contributing factors.
Stifel analysts held their rating at "Hold" with a price target of $68.00, noting modest EBITDA growth since the acquisition of Popeyes in 2017. They also speculated on a potential increase in share value in the event of a demerger, though they assigned a low probability to this scenario.
Guggenheim upgraded the company’s stock rating from Neutral to Buy, despite lowering the price target to $71 from $74. The firm revised the EPS estimates for the company to $3.63 for 2025 and $3.85 for 2026, citing recent pressures on the stock.
Lastly, Bernstein noted that Restaurant Brands International may already reflect negative market sentiment due to its relatively lower valuation. These are recent developments that reflect the ongoing analysis and projections made by different firms about Restaurant Brands International.
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