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Restaurant Brands Stock Breakout: Josh Brown's Best Pick

Restaurant Brands International (QSR) has been named to Josh Brown's "Best Stocks in the Market" list following a technical breakout above $75. The company, behind brands like Tim Hortons and Burger King, is executing a turnaround under Executive Chairman Patrick Doyle. QSR plans significant international expansion with 1,800 new stores annually by 2028. Financial projections include 6% revenue growth and 35% EBIT growth for the next quarter. Pershing Square remains a key supportive shareholder. The stock's rise is backed by improving franchisee economics and brand revitalization efforts.

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Restaurant Brands Stock Breakout: Josh Brown's Best Pick

Restaurant Brands International (QSR), owner of Tim Hortons and Burger King, has earned a spot on Josh Brown's "Best Stocks in the Market" list as its stock breaks out above $75.

Company Profile

  • QSR operates four major quick-service brands: Tim Hortons, Burger King, Popeyes Louisiana Kitchen, and Firehouse Subs.
  • Over 33,000 restaurants in 125 countries, with more than 95% franchised.

Technical Analysis

  • The stock has broken through resistance at $75, targeting levels not seen in two years.
  • This breakout is supported by improving fundamentals.

Leadership and Turnaround Strategy

  • Patrick Doyle, former Domino's Pizza CEO, serves as Executive Chairman.
  • Joshua Kobza is CEO, responsible for daily operations.
  • Doyle's experience includes a successful turnaround at Domino's, where he improved product quality and digital sales.
  • Current strategy "Reclaim the Flame" for Burger King involves investments in remodels, marketing, and franchisee support.
  • Early signs show Burger King U.S. same-store sales turning positive and franchisee profitability improving.
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Growth and Expansion Plans

  • QSR aims to open 1,800 net new restaurants per year by 2028, with the majority in international markets.
  • International expansion increases royalty rates, enhancing EPS due to the franchised model.
  • Firehouse Subs leads growth with 7.7% net restaurant increase last year.
  • Popeyes is undergoing leadership changes after a sales decline.

Financial Outlook

  • For the upcoming quarter, QSR expects 6% revenue growth and 35% EBIT growth year-over-year.
  • The company has six international markets with over $1 billion in sales each.
  • High franchising percentage means most incremental revenue contributes directly to earnings.

Shareholder Perspective

  • Pershing Square, founded by Bill Ackman, has been a major shareholder since QSR's 2012 IPO.
  • The fund's continued support aligns with the company's strategic direction.

Risk Management

  • The original analysis mentions risk management as a future topic but does not detail specific risks in this excerpt.
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