Investing.com -- Argus upgraded Restaurant Brands International Inc (NYSE:QSR) to Buy from Hold, citing significant global growth opportunities and plans to improve margins under executive chairman Patrick Doyle.
The firm raised its price target to $80, reflecting over 20% upside potential, including dividends.
“We think there is significant room for Restaurant Brands to grow its brands globally,” Argus analyst John Staszak wrote, highlighting plans to expand through master franchisees and joint ventures, including Popeye's China and Tim Hortons China.
Patrick Doyle, former CEO of Domino’s Pizza (NYSE:DPZ), joined as executive chairman in 2022 and invested $30 million in Restaurant Brands stock.
Argus noted Doyle’s success in driving digital sales and improving franchisee earnings at Domino’s and expects him to replicate similar success at Restaurant Brands .
Restaurant Brands shares are trading at 16.8 times Argus’ revised 2025 EPS estimate, below the peer average.
“We believe the shares are undervalued given prospects for international growth and store renovations,” Argus concluded, reiterating a Buy rating with a price target of $80.
QSR reported Q4 2024 adjusted EPS of $0.81, beating consensus estimates by $0.03 and up from $0.75 a year earlier. Revenue increased 19.7% year-over-year to $2.3 billion, driven by unit expansion and value menus that attracted inflation-hit consumers. Same-store sales grew 2.5%, led by 1.1% growth at Burger King, 2.2% at Tim Hortons, 1.6% at Popeye's, and 0.3% at Firehouse Subs.
Argus expects revenue to grow 7% to $9 billion in 2025, supported by continued unit expansion and a 50-basis-point increase in EBITDA margin to 33.5%. The firm raised its 2025 EPS estimate to $4.05 from $4.00 and maintained its 2026 estimate at $4.40.
Restaurant Brands increased its quarterly dividend to $0.62 per share, payable on April 4, 2025. Argus projects dividends of $2.44 in 2025 and $2.60 in 2026. The company ended Q4 2024 with $1.33 billion in cash and a long-term debt/capital ratio of 73.6%.
