Restaurant Brands Stock Ready To Rebound?

Core Viewpoint - Restaurant Brands International Inc. (QSR) stock has declined 10% year-to-date, currently priced around $68 per share, but is expected to see modest gains in the near term despite underperforming compared to broader indices and peers like Starbucks [1][2] Financial Performance - QSR's Q3 revenues grew 25% year-over-year to $2.3 billion, driven by system-wide sales increases, particularly in the International and Tim Hortons segments [2] - Consolidated comparable sales were only 0.3%, a significant drop from 7% a year ago, with declines across all segments: Burger King (-0.7%), Popeyes (-4.0%), Tim Hortons (2.3% from 7.6%), and Firehouse Subs (-4.8%) [2] - Earnings per share (EPS) were flat year-over-year at $0.79, while adjusted profits increased 4.6% to $0.93 [2] Stock Performance and Valuation - QSR has shown consistent value growth over the past three years, with returns of 3% in 2021, 11% in 2022, and 25% in 2023, but has not consistently outperformed the market [3] - The stock trades at a lower price-to-earnings (P/E) ratio of approximately 17x, compared to peers like Yum! Brands (25x), McDonald's (26x), and Starbucks (29x), and is below its five-year average of 24.5x [4] - Forecasts for fiscal year 2024 predict revenues of $8.2 billion (up nearly 17% year-over-year) and EPS of $4.01, leading to a revised valuation of around $75 per share, which is 10% higher than the current market price [4] Growth Prospects - QSR has solid mid-to-long-term growth prospects, particularly for Tim Hortons, Popeyes, and Firehouse Subs, which have less international penetration compared to McDonald's and Burger King, indicating potential for new restaurant openings and revenue growth [5] - The company reported a 3.8% net restaurant growth year-over-year, totaling 31,525 restaurants globally, despite facing cost inflation [5] - QSR's five-year outlook anticipates system-wide sales of $60 billion by 2028, reflecting a compounded annual growth rate (CAGR) of approximately 7% from 2023, and an adjusted operating profit of $2 billion by 2028, with a CAGR of 7.8% [6]