Restaurant Brands' Fully Franchised Model Carries Minimal Earnings Risk To Cost Inflation: Analyst
Portfolio Pulse from Nabaparna Bhattacharya
Oppenheimer analyst Brian Bittner has reiterated an Outperform rating on Restaurant Brands International Inc. (NYSE:QSR) with a price target of $83. Bittner is optimistic about higher near-term same-store sales (SSS) forecasts following Q2's strong results. He believes that Restaurant Brands' fully franchised model carries minimal earnings risk to cost inflation and drives global unit growth to >5% algorithm. However, the Canadian dollar fx headwind of ~2.5% relative to end of Q2 overly impacts QSR with ~52% of revenue from Canada. Also, Q3 interest rates to-date are up 43bps vs. Q2, which impacts ~20% of QSR's debt that is floating-rate.
August 28, 2023 | 7:14 pm
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Restaurant Brands International Inc. (QSR) has received an Outperform rating from Oppenheimer analyst Brian Bittner, with a price target of $83. The company's fully franchised model is seen as carrying minimal earnings risk to cost inflation. However, the Canadian dollar fx headwind and rising interest rates could impact the company's earnings.
The Outperform rating and price target of $83 by Oppenheimer analyst Brian Bittner indicates a positive outlook for Restaurant Brands International Inc. (QSR). The company's fully franchised model is seen as a strength, reducing earnings risk to cost inflation. However, the company could face challenges due to the Canadian dollar fx headwind and rising interest rates, which could impact its earnings. This could potentially affect the company's stock price in the short term.
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