Restaurant Brands International
QSR
$77.16
-0.62%
Restaurant Brands International Inc. (QSR) is a global quick-service restaurant company that franchises and operates four iconic brands—Burger King, Tim Hortons, Popeyes Louisiana Kitchen, and Firehouse Subs—across over 33,000 restaurants in more than 120 markets. As one of the world's largest restaurant companies, it generates roughly $47 billion in system sales and derives revenue primarily from franchise fees, property income, and supply chain sales, distinguishing itself through a heavily franchised, asset-light model. The current investor narrative centers on the accelerating turnaround at Burger King, which posted 5.8% same-store sales growth in Q1 2026, and the potential for margin expansion and valuation re-rating as the company benefits from improved operational execution and a favorable quick-service restaurant environment.…
QSR
Restaurant Brands International
$77.16
Related headlines
Investment Opinion: Should I buy QSR Today?
QSR is rated a Buy based on the analyst consensus and our assessment. The thesis is that the Burger King turnaround, combined with a strong franchise model, will drive earnings growth and justify the current valuation. The average analyst target of $85.74 implies a 10.4% upside, and the forward PE of 17.6x is reasonable for a company with accelerating revenue growth and improving margins.
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QSR 12-Month Price Forecast
The AI assessment is bullish with medium confidence. QSR's improving operational performance, particularly the Burger King turnaround, and reasonable forward valuation support a positive outlook. However, high leverage and consumer cyclicality introduce uncertainty. If revenue growth continues to accelerate and margins expand, the stock could re-rate higher; conversely, any signs of deceleration or macro weakness could lead to a downgrade. The key monitor is whether Burger King's same-store sales growth remains above 5% and whether the company can maintain its dividend coverage.
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 $85.65 and implied upside of +11.0% versus the current price.
Average Target
$85.65
0 analysts
Implied Upside
+11.0%
vs. current price
Analyst Count
—
covering this stock
Price Range
$78 - $104
Analyst target range
The target price range spans from $78.00 to $104.00, with the low end near the current price, suggesting limited downside risk, while the high end implies a 34% upside, reflecting optimism about the Burger King turnaround and potential multiple expansion. The wide spread of $26 between low and high targets indicates significant uncertainty about the pace of recovery and consumer spending. Recent ratings actions have been mostly neutral, with no major upgrades or downgrades in the past three months, but the overall consensus remains positive, supported by the company's strong Q1 results and strategic initiatives.
Bulls vs Bears: QSR Investment Factors
QSR presents a balanced but slightly bullish case. The Burger King turnaround, accelerating revenue growth, and attractive forward valuation are strong positives, while high leverage, an elevated payout ratio, and consumer cyclicality are key risks. The most important tension is whether the forward PE of 17.6x is justified by the expected EPS growth to $5.89; if the turnaround continues and margins expand, the stock could re-rate higher, but any stumble could lead to multiple compression. Currently, the evidence slightly favors the bulls, given the tangible operational improvements and analyst consensus.
Bullish
- Burger King turnaround gaining traction: Burger King posted 5.8% same-store sales growth in Q1 2026, a key driver of the company's overall revenue acceleration. This confirms the turnaround strategy is working and provides a clear catalyst for continued growth.
- Accelerating revenue growth: Q1 2026 revenue grew 7.35% YoY to $2.264 billion, up from 4.7% in Q4 2025 and 6.9% in Q3 2025. This acceleration indicates improving operational momentum across the portfolio.
- Attractive forward valuation: With a forward PE of 17.6x versus a trailing PE of 28.9x, the market is pricing in significant earnings growth. The consensus EPS estimate of $5.89 for next year implies a PEG ratio that, despite being negative due to past earnings volatility, suggests reasonable value relative to growth.
- Strong analyst upside: The average analyst target price of $85.74 implies a 10.4% upside from the current price of $77.64, while the high target of $104 suggests a 34% upside. With a 'Buy' recommendation from 23 analysts, sentiment is clearly positive.
Bearish
- High leverage and interest burden: Debt-to-equity stands at 4.84x, and Q1 2026 interest expense was $171 million, which consumed a significant portion of operating income. This leverage amplifies downside risk if earnings falter.
- Elevated payout ratio: The payout ratio is 142.8%, meaning the dividend is not fully covered by earnings. This could force a dividend cut or increased borrowing if cash flows weaken, posing a risk to income investors.
- Dependence on consumer spending: As a consumer cyclical, QSR is sensitive to economic downturns. A recession could pressure same-store sales and margins, especially in discretionary quick-service categories.
- Valuation premium to peers: With a trailing PE of 28.9x, QSR trades at a premium to the broader market and some restaurant peers. If growth decelerates, the multiple could contract, leading to underperformance.
QSR Technical Analysis
QSR is in a clear uptrend, with the stock up 19.1% over the past year and currently trading at $77.64, near the top of its 52-week range (61.33–81.96), at approximately 94.7% of that range. This positioning near the highs reflects strong momentum and investor confidence, though it also suggests the stock may be approaching overbought conditions, especially given its beta of 0.53, which indicates lower volatility than the broader market.
Beta
0.53
0.53x market volatility
Max Drawdown
-13.3%
Largest decline past year
52-Week Range
$61-$82
Price range past year
Annual Return
+18.2%
Cumulative gain past year
| Period | QSR Return | S&P 500 |
|---|---|---|
| 1m | +2.9% | +4.0% |
| 3m | +1.8% | +5.3% |
| 6m | +12.1% | +12.6% |
| 1y | +18.2% | +20.1% |
| ytd | +13.8% | +13.3% |
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QSR Fundamental Analysis
QSR's revenue growth has been solid, with Q1 2026 revenue of $2.264 billion, up 7.35% year-over-year, accelerating from the 4.7% growth seen in Q4 2025 and the 6.9% in Q3 2025. The growth is driven by Burger King's turnaround (5.8% same-store sales growth) and Tim Hortons' strong performance, with segment revenues of $365 million and $997 million, respectively, in the latest quarter. However, the company's net income of $338 million in Q1 2026 was boosted by a low effective tax rate of 7.9%, and excluding that, profitability remains solid but more moderate.
Quarterly Revenue
$2.3B
2026-03
Revenue YoY Growth
+7.3%
YoY Comparison
Gross Margin
49.6%
Latest Quarter
Free Cash Flow
$1.5B
Last 12 Months
Revenue & Net Income Trends (2 Years)
Revenue Breakdown
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Valuation Analysis: Is QSR Overvalued?
Given QSR's positive net income, the PE ratio is the primary valuation metric. The trailing PE is 28.9x, while the forward PE is 17.6x, implying the market expects significant earnings growth, which is consistent with the consensus EPS estimate of $5.89 for the next fiscal year. The gap between trailing and forward PE suggests investors are pricing in a substantial improvement in profitability, likely driven by Burger King's turnaround and operational efficiencies.
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
16.2x
Enterprise Value Multiple
Investment Risk Disclosure
Financial risks are significant due to QSR's high leverage, with a debt-to-equity ratio of 4.84x and interest expense of $171 million in Q1 2026. This leverage magnifies the impact of any earnings shortfall, and the payout ratio of 142.8% indicates the dividend is not fully covered by earnings, potentially straining cash flows. While free cash flow is strong at $1.51 billion TTM, a sustained downturn could force the company to prioritize debt repayment over dividend growth or share buybacks. Additionally, the low effective tax rate of 7.9% in Q1 2026 boosted net income; if this normalizes, EPS could be lower than expected.
FAQ
The key risks are: 1) Financial risk from high leverage (debt-to-equity 4.84x) and a payout ratio of 142.8%, which could strain cash flows if earnings decline. 2) Market risk from consumer cyclicality, as a recession could hurt same-store sales. 3) Competitive risk from other QSR chains like McDonald's and Yum Brands, which are also innovating. 4) Company-specific risk if the Burger King turnaround stalls. The most severe risk is a combination of these factors leading to a drop toward the 52-week low of $61.33, a potential -21% from the current price.
The 12-month forecast is moderately bullish. The base case (50% probability) sees the stock trading in the $80-$90 range, with the average analyst target of $85.74. The bull case (30% probability) could push it to $90-$104, while the bear case (20% probability) could see it fall to $61-$78. The most likely scenario is the base case, driven by continued Burger King growth and stable consumer spending. Key assumptions include same-store sales growth of 4-5% and EPS meeting the consensus of $5.89.
QSR's trailing PE of 28.9x is elevated, but the forward PE of 17.6x suggests the market expects significant earnings growth. Compared to the broader market and some peers, the forward valuation is reasonable. The PEG ratio is negative due to past earnings volatility, but if the consensus EPS estimate of $5.89 is achieved, the stock would be trading at a PEG of around 1.0, indicating fair value. Overall, QSR appears fairly valued, with the potential for upside if the turnaround exceeds expectations.
QSR is a good buy for investors with a medium-to-long-term horizon who are comfortable with some risk. The stock offers a 4.86% dividend yield and a forward PE of 17.6x, which is reasonable given the expected EPS growth to $5.89. The average analyst target of $85.74 implies a 10.4% upside, and the Burger King turnaround provides a clear catalyst. However, the high payout ratio (142.8%) and leverage (debt-to-equity 4.84x) are risks. If you believe the turnaround will continue, it's a buy; otherwise, wait for a better entry point.
QSR is more suitable for long-term investment due to its turnaround story and dividend income. The stock has a beta of 0.53, indicating lower volatility than the market, but it is still subject to cyclical swings. Short-term trading could be profitable given the recent momentum, but the high payout ratio and leverage make it riskier. A minimum holding period of 3-5 years is recommended to allow the Burger King turnaround to fully materialize and for the dividend to be covered by earnings. For income-focused investors, the 4.86% yield is attractive, but they should monitor the payout ratio.