Restaurant Brands International (QSR) PT Lowered to $80 at KeyBanc

KeyBanc analyst Eric Gonzalez lowered the price target on Restaurant Brands International (NYSE: QSR) to $80.00 (from $85.00) while maintaining a Overweight rating.

The analyst commented, "QSR stock is down 10% YTD, vs. an -8% decline for its peer group and a +15% gain for the S&P 500. Our sense is this underperformance is a function of sluggish industry trends and poor investor sentiment as competitors more aggressively push value. Based on our proprietary data/industry conversations, we suspect 2Q24 Burger King U.S. SSS trends may fall several percentage points below consensus, and we are reducing our SSS growth/EPS estimates accordingly. However, we believe the brand is in a better position to compete given efforts to drive operational improvement and move away from deep discounts (e.g., coupons). We are trimming our PT to $80 and our 2024E/2025E EPS to $3.34/$3.85 to account for our lower BK U.S. SSS growth assumptions. We are, however, maintaining our OW rating as we believe other parts of RBI’s business remain healthy and as we see valuation upside over the LT from ongoing improvements to store-level cash flow, development, and visibility on store remodels. Our PT equates to ~21x our 2025 EPS."

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