Restaurant Brands International
QSR
$72.86
-1.39%
Restaurant Brands International Inc. (QSR) is a global quick-service restaurant company that franchises and operates four major brands: Burger King, Tim Hortons, Popeyes Louisiana Kitchen, and Firehouse Subs, generating approximately $47 billion in system sales across over 33,000 restaurants in more than 120 markets. As one of the largest restaurant companies globally, it competes with McDonald's and Yum! Brands, leveraging a heavily franchised model that generates stable royalty and rental income. The current investor narrative centers on the ongoing turnaround at Burger King, which posted 5.8% same-store sales growth in Q1 2026, and the potential for valuation re-rating following Yum Brands' sale of Pizza Hut, which has drawn attention to QSR's relative undervaluation. Additionally, the company's high dividend yield of 4.86% and consistent cash flow generation make it a focus for income-oriented investors, though concerns about its high leverage and mixed same-store sales trends across its brands persist.…
QSR
Restaurant Brands International
$72.86
Related headlines
Investment Opinion: Should I buy QSR Today?
Based on the analysis, QSR is rated a Buy. The thesis is that the Burger King turnaround, combined with a high dividend yield and potential re-rating, offers a favorable risk/reward. The analyst consensus is Buy with an average target of $85.04, implying 16.6% upside. Supporting evidence includes: revenue growth of 7.35% in Q1 2026, a forward PE of 16.52x (reasonable for the sector), a gross margin of 41.1%, and strong free cash flow of $1.51 billion. The stock trades at a discount to its historical average PE, and the Yum deal could catalyze a re-rating. However, the high debt-to-equity of 4.84 and negative PEG are key risks. This Buy would be downgraded to Hold if the forward PE exceeds 20x or if revenue growth falls below 5%. Conversely, it could be upgraded if the debt-to-equity ratio improves below 3.0. Overall, QSR appears undervalued relative to its growth prospects and dividend yield.
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QSR 12-Month Price Forecast
The AI assessment leans bullish due to the strong revenue growth, reasonable forward valuation, and analyst optimism. However, confidence is medium because of the high leverage and negative PEG ratio. The key factors supporting a bullish stance are the accelerating revenue growth and the potential for a re-rating. If the company can reduce debt and maintain growth, the stock could outperform. Conversely, if the turnaround fails or debt becomes a problem, the stance would be downgraded to neutral or bearish.
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 $85.71 and implied upside of +17.6% versus the current price.
Average Target
$85.71
0 analysts
Implied Upside
+17.6%
vs. current price
Analyst Count
—
covering this stock
Price Range
$78 - $104
Analyst target range
The target price range spans from a low of $76.00 to a high of $100.00, representing a wide spread of 31.6% from the low to the high. The high target of $100 implies a 37.1% upside, likely assuming a successful Burger King turnaround, continued international growth, and multiple expansion toward historical norms. The low target of $76 suggests a modest 4.2% upside, possibly pricing in margin pressure from commodity costs, competitive threats, or a slowdown in consumer spending. The wide range indicates significant uncertainty about the pace of earnings recovery and the sustainability of same-store sales growth. With a beta of 0.53, QSR is less volatile than the market, which may appeal to risk-averse investors, but the stock's relative underperformance (relative strength of -15.16% over 1 year) suggests it has lagged the broader market, and the recent 3-month decline of -8.52% indicates negative momentum that could persist if the broader market weakens.
Bulls vs Bears: QSR Investment Factors
QSR presents a mixed picture: the Burger King turnaround is real, driving revenue growth and a high dividend yield, but the company's high leverage, negative PEG, and market underperformance are significant concerns. The bull case is supported by analyst optimism and a potential re-rating catalyst from Yum's deal, while the bear case is anchored in financial fragility and mixed brand performance. Currently, the evidence slightly favors the bull case given the strong Q1 results and valuation upside, but the high debt and payout ratio are the key tensions that could derail the thesis if not managed.
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 7.35% revenue growth. This confirms the turnaround strategy is working, which is central to the bull thesis.
- Attractive dividend yield of 4.86%: QSR offers a high dividend yield of 4.86%, supported by a payout ratio of 142.8% (though this is elevated, it reflects the company's commitment to returning cash). This makes it appealing for income investors, especially with a beta of 0.53.
- Undervalued relative to peers after Yum deal: Yum Brands' sale of Pizza Hut has set a new valuation benchmark, making QSR appear relatively undervalued. This could attract capital inflows and support a re-rating, as noted in recent news.
- Strong free cash flow generation: QSR generated $1.51 billion in trailing twelve-month free cash flow, providing ample capacity for debt reduction, dividends, and growth investments. This supports the sustainability of its dividend and balance sheet.
Bearish
- High leverage with debt-to-equity of 4.84: QSR's debt-to-equity ratio of 4.84 is extremely high, indicating significant financial leverage. This increases vulnerability to rising interest rates and could constrain financial flexibility.
- Negative PEG ratio signals earnings uncertainty: The PEG ratio is -1.09, which is negative, suggesting that expected earnings growth is negative or distorted by non-recurring items. This raises concerns about the quality of future earnings.
- Underperformance relative to market: QSR's 1-year return of +6.30% significantly lags the S&P 500's +21.46%, and its relative strength is -15.16% over 1 year. This indicates persistent underperformance and negative momentum.
- Mixed same-store sales across brands: While Burger King is improving, Tim Hortons remains a drag due to softness in Canada. This brand-level inconsistency could limit overall growth and create execution risk.
QSR Technical Analysis
QSR's price trend over the past year has been moderately positive, with a 1-year price change of +6.30%, but the stock has underperformed the S&P 500, which gained 21.46% over the same period. The current price of $72.92 sits at 72.9% of the 52-week range (low $61.33, high $81.96), indicating the stock is closer to its highs but has pulled back from the peak. This positioning suggests a recovery from the lows but with recent weakness, as the stock is 11.0% below its 52-week high, reflecting a mix of optimism and caution.
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
+13.0%
Cumulative gain past year
| Period | QSR Return | S&P 500 |
|---|---|---|
| 1m | -3.2% | +2.4% |
| 3m | -6.9% | +4.7% |
| 6m | +3.1% | +11.7% |
| 1y | +13.0% | +21.3% |
| ytd | +7.4% | +13.4% |
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QSR Fundamental Analysis
Revenue growth has been solid, with Q1 2026 revenue of $2.264 billion, up 7.35% year-over-year from $2.109 billion in Q1 2025. The multi-quarter trend shows acceleration: Q1 2026 growth of 7.35% compares to Q4 2025 revenue of $2.466 billion (up 7.4% from Q4 2024's $2.296 billion) and Q3 2025 revenue of $2.449 billion (up 6.9% from Q3 2024's $2.291 billion). Segment-wise, Tim Hortons leads with $997 million in revenue, followed by Burger King at $365 million, Popeyes at $190 million, and Firehouse Subs at $60 million. The growth is driven by Burger King's turnaround, with 5.8% same-store sales growth, and international expansion, though Tim Hortons' performance remains a drag due to softness in Canada.
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 that QSR is profitable with a trailing net income of $338 million in Q1 2026, the PE ratio is the primary valuation metric. The trailing PE is 28.91x, while the forward PE is 16.52x, implying the market expects significant earnings growth (approximately 75% increase) over the next year. This gap suggests the market is pricing in a strong recovery in earnings, likely driven by margin expansion and the Burger King turnaround. The PEG ratio is negative at -1.09, indicating that earnings growth is expected to be negative or the ratio is distorted by non-recurring items, which warrants caution.
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 prominent: QSR's debt-to-equity ratio of 4.84 is extremely high, indicating heavy reliance on debt financing. Interest expenses were $171 million in Q1 2026, and with rising rates, this could pressure margins. The payout ratio of 142.8% means dividends exceed net income, which is unsustainable without either cutting the dividend or increasing debt. Free cash flow of $1.51 billion provides some cushion, but it is not sufficient to cover both debt obligations and dividend payments indefinitely. Additionally, the negative PEG ratio of -1.09 suggests that earnings growth expectations are unclear, possibly due to non-recurring items, which adds uncertainty to the financial outlook.
FAQ
The key risks are: 1) High leverage (debt-to-equity of 4.84) which could strain finances if interest rates rise; 2) Unsustainable dividend payout ratio of 142.8%, risking a cut; 3) Mixed performance across brands, with Tim Hortons dragging; 4) Macro risks such as recession or consumer spending slowdown, which could hurt sales. The most severe risk is a dividend cut, which would likely cause a significant stock price decline.
The 12-month forecast is moderately bullish. The base case (50% probability) targets $76-$85, with an average of $85.04. The bull case (30% probability) targets $85-$100, and the bear case (20% probability) targets $61-$76. The most likely scenario is the base case, assuming continued Burger King growth and stable macro conditions. The stock is expected to appreciate modestly, with the dividend providing a cushion.
QSR is currently undervalued relative to its growth prospects. The trailing PE of 28.91x is high, but the forward PE of 16.52x suggests the market expects significant earnings growth. Compared to peers, QSR trades at a discount, especially after Yum's Pizza Hut sale highlighted its relative undervaluation. The stock is also below its 52-week high of $81.96, and the average analyst target of $85.04 implies upside. The market is pricing in a successful turnaround, but not fully, offering an opportunity.
QSR is a good buy for investors seeking income and value, given its 4.86% dividend yield and 16.6% upside to the average analyst target of $85.04. The Burger King turnaround is driving revenue growth, and the stock is trading at a forward PE of 16.52x, which is reasonable. However, the high debt-to-equity ratio of 4.84 and negative PEG ratio are risks. It is a good buy for those with a long-term horizon and tolerance for leverage risk, but not for those seeking quick gains or low-risk investments.
QSR is more suitable for long-term investment due to its high dividend yield and potential for gradual appreciation. The beta of 0.53 indicates lower volatility, making it less attractive for short-term trading. The company's growth is driven by a multi-year turnaround, so a holding period of at least 3-5 years is recommended to fully realize the benefits. Short-term traders may find limited opportunities given the stock's low volatility and recent underperformance.