Teal Linde Restaurant Brands International QSR-T BUY Feb 10, 2025

She scores it 6 out of 10 for value and fundamentals, and it's on her watch list. Likes it. Sees 11.5% upside. Analysts are mixed, though. A lot depends on the future economy---will benefit as interest rates decline and people eat out more.

Challenged of late. Technicals are, at best, neutral. 200-day MA sideways, and stock's trading below it. When one segment does poorly, it puts a cloud over the entire company. Owns, but it's in the penalty box. He many take action given the technical structure. 17.5x forward PE for 10% growth, not expensive. Two-month GST holiday may help, but so far it hasn't.

Names in the restaurant industry and some companies that are considered “value names” have been under pressure recently. In addition, the weak revenue growth of QSR in recent quarters also compressed the valuation multiples of QSR from around 20x to 17.6x now. QSR has the lowest P/E among the restaurant royalty names like YUM, MCD, and DPZ.

We think QSR is a high-quality capital-light royalty name that is facing a near-term headwind; its valuation looks more decent than ever before. We think QSR continues to have a long runway for growth in the international markets, given its brand portfolio is still relatively underpenetrated in emerging markets. It could be considered within the top 10% of Canadian names in terms of business quality. That being said, the restaurant industry is fiercely competitive, so we would size the position appropriately.
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Large array of brands including Burger Kind/Tim Hortons. Company debt loads are too high for preference. Good job at managing company through M&A - however would prefer other options in the market. 

They own brands, but some like Tim Horton's have fallen in quality. Also, they carry a lot of debt. Some of their brands are not that strong.

Not buying it now. For options, you could go out to the May $94 put and sell it for close to $4. If it pulls back, you're force to buy at $94. The implied volatility is decent. Pays a 3% dividend; you can get more yield by selling upside calls.

The valuation assumes there is no growth happening but there is. It is expanding, including overseas, but not focused on China like its peers. Has a new CEO from Dominoes which did very well.

Quality management lets you hold a name for a very long time. New chairman turned around DPZ, hired to do the same here. Hasn't yet happened, spending lots to remodel Burger Kings. Tim's and Popeye's doing well. Tough macro. Cheapest in the restaurant space.