Skip to Content
Morningstar
Get 14 Days Free

Restaurant Brands International Inc QSR

Morningstar Rating
Rating as of

Morningstar’s Analysis

Valuation
Currency in USD
Is it the right time to buy or sell?
Find out with Morningstar Premium
Is it the right time to buy or sell?
Find out with Morningstar Premium

1-Star Price

PREMIUM

5-Star Price

PREMIUM

Economic Moat

PREMIUM

Capital Allocation

PREMIUM

International Strength Generates Robust Second-Quarter Results for RBI; Shares Slightly Undervalued

Sean Dunlop Equity Analyst

Analyst Note

| Sean Dunlop |

Narrow-moat Restaurant Brands International generated solid second-quarter results, with a 32% jump in consolidated system sales (up 4.3% from 2019 levels) reflecting loosening restrictions in key international markets. Strength was widespread, with all three brands generating double-digit growth relative to 2020, and $1.36 billion in revenue (net of foreign exchange) eclipsed our quarterly forecast of $1.31 billion by about 4%. After contemplating international unit growth strength at Tim Horton’s and time value of money, we expect to raise our $69 fair value estimate by a low- to mid-single-digit percentage and view shares as undervalued even after a 4% rise after the report.

Read Full Analysis

Company Profile

Business Description

Restaurant Brands International is one of the largest restaurant companies in the world, with $31 billion in 2020 systemwide sales across a footprint that spans more than 27,000 restaurants and 100 countries. The firm generates revenue primarily from retail sales at its company-owned restaurants, royalty fees and lease income from franchised stores, and from its Tim Horton’s supply chain operations. Formed in 2014 after 3G Capital’s acquisition of Tim Horton’s International, the Restaurant Brands portfolio now includes Burger King (18,700 units), Tim Horton’s (5,000 units), and Popeyes Louisiana Kitchen (3,575 units).

Contact
130 King Street West, Suite 300, P.O. Box 339
Toronto, ON, M5X 1E1, Canada
T +1 905 339-5724
Sector Consumer Cyclical
Industry Restaurants
Most Recent Earnings Jun 30, 2021
Fiscal Year End Dec 31, 2020
Stock Type —
Employees 5,200

Related

Our Picks
6 Fast-Food Stocks to Savor
Of the menu options, these U.S. quick-service restaurants are worth tasting.
Sachin Nagarajan
Commentary
How Will Spending Habits Change in 2021?
What's poised for a comeback when consumer behavior normalizes?
David Sekera
Stock Strategist Industry Reports
Consumer Behavior Changes Reshape Restaurant Industry
While we believe that most publicly traded restaurant companies will survive COVID-related disruptions, we still believe that the worst may be yet come for the broader industry.
R.J. Hottovy
Stock Analyst Update
What Closures Mean for Restaurant Industry
Investors should watch for names with value, technology, healthy balance sheets.
R.J. Hottovy
Stock Analyst Update
RBI Builds on Brand Momentum, Unit Prospects
We plan to raise our fair value estimate for the narrow-moat firm.
R.J. Hottovy
Premium Article
21 Cheap Large Growth Stocks
In addition to several technology and healthcare companies, our list of bargains includes a restaurant operator, a brewer, and a jet-engine manufacturer.
Susan Dziubinski
Premium Article
12 Cheap Summer Stocks
Premium Exclusive: These undervalued picks hail from industries associated with the "play" that comes with the season.
Susan Dziubinski
Premium Article
4 Misunderstood Stocks With Moats
Premium Exclusive: The market was unimpressed with the results from these moaty companies this week, but we think their long-term stories remain intact.
Susan Dziubinski
US Videos
Our Best Dividend-Stock Ideas
We think Enbridge, P&G, Duke Energy, and Restaurant Brands offer durable dividends at good prices.
Morningstar.com
US Videos
Restaurant Brands' Dividend Keeps Heating Up
We expect the company's healthy top-line growth to maintain and grow its dividend payout.
R.J. Hottovy
US Videos
Panera Buyout Speculation No Surprise
While it is hard to handicap if a deal will happen, there has been an uptick in restaurant M&A in the last few months and it's easy to see that Panera would be an attractive target.
R.J. Hottovy
Stock Analyst Update
Burger King Parent's Compelling Investment Story
We wouldn't require much margin of safety before taking a position in this narrow-moat firm.
R.J. Hottovy
Stock Strategist
McDonald's Poised to Accelerate Growth
Management improvements, operational enhancements, and a strong cash return profile should keep this stock on the radar.
R.J. Hottovy
Stock Strategist
McDonald's Serves Up a Wide Moat
Third-quarter results reinforce its brand intangible asset.
R.J. Hottovy
US Videos
Friday Five: Don't Fret Over Rate Hike Timing
The exact timing of a rate increase shouldn't have a huge impact for most long-term investors. Plus, perspective on Wal-Mart's wage hike, Berkshire's energy sale, and Priceline's lift-off this week.
Jeremy Glaser
Commentary
Sale of Energy Stocks the Biggest Highlight in Berkshire's 4Q Equity Portfolio
Warren Buffett’s Berkshire Hathaway had a shift in strategy in the fourth quarter as it unloaded most of its energy holdings to buy more of Deere and IBM.
Greggory Warren

Transparency is how we protect the integrity of our work and keep empowering investors to achieve their goals and dreams. And we have unwavering standards for how we keep that integrity intact, from our research and data to our policies on content and your personal data.

We’d like to share more about how we work and what drives our day-to-day business.

We sell different types of products and services to both investment professionals and individual investors. These products and services are usually sold through license agreements or subscriptions. Our investment management business generates asset-based fees, which are calculated as a percentage of assets under management. We also sell both admissions and sponsorship packages for our investment conferences and advertising on our websites and newsletters.

How we use your information depends on the product and service that you use and your relationship with us. We may use it to:

  • Verify your identity, personalize the content you receive, or create and administer your account.
  • Provide specific products and services to you, such as portfolio management or data aggregation.
  • Develop and improve features of our offerings.
  • Gear advertisements and other marketing efforts towards your interests.

To learn more about how we handle and protect your data, visit our privacy center.

Maintaining independence and editorial freedom is essential to our mission of empowering investor success. We provide a platform for our authors to report on investments fairly, accurately, and from the investor’s point of view. We also respect individual opinions––they represent the unvarnished thinking of our people and exacting analysis of our research processes. Our authors can publish views that we may or may not agree with, but they show their work, distinguish facts from opinions, and make sure their analysis is clear and in no way misleading or deceptive.

To further protect the integrity of our editorial content, we keep a strict separation between our sales teams and authors to remove any pressure or influence on our analyses and research.

Read our editorial policy to learn more about our process.