On Wednesday, Loop Capital increased the price target for Restaurant Brands (TSX:QSP_u) International (NYSE:QSR) to $93 from the previous $86, while maintaining a Buy rating on the stock. The firm's decision came after Restaurant Brands reported first-quarter earnings that aligned with expectations.
Restaurant Brands announced an adjusted earnings per share (EPS) of $0.73 for the first quarter of 2024, matching Loop Capital's forecast and slightly surpassing the consensus estimate of $0.72. Burger King's U.S. comparable sales saw a 3.9% rise in the quarter, narrowly missing Loop Capital's prediction of 4.0% growth and the consensus projection of a 4.1% increase. This growth included flat traffic numbers.
Tim Hortons, another brand under the Restaurant Brands umbrella, experienced a significant 7.5% increase in comparable sales in Canada. This performance substantially exceeded both Loop Capital's 3.5% growth estimate and the consensus of 4.8%, with mid-single-digit positive traffic contributing to the surge.
The financial firm reiterated its Buy rating for Restaurant Brands, attributing the revised price target to a valuation of 21 times the estimated 2024 enterprise value to earnings before interest, taxes, depreciation, and amortization (EV/EBITDA). The positive assessment reflects the company's solid performance in the face of market expectations.
Loop Capital's updated price target suggests confidence in Restaurant Brands' growth prospects and operational efficiency. The firm's analysis indicates that the company is well-positioned to continue its upward trajectory in the fast-food industry.
InvestingPro Insights
According to the latest metrics from InvestingPro, Restaurant Brands International (NYSE:QSR) boasts a robust market capitalization of $34.13 billion. The company's Price to Earnings (P/E) ratio stands at 20, which is slightly below the adjusted P/E ratio for the last twelve months as of Q4 2023, which was 19.28. This suggests that investors are willing to pay less for each dollar of QSR's earnings than they were in the recent past, potentially indicating a more favorable valuation. The company's revenue growth has been positive, with a 7.95% increase over the last twelve months as of Q4 2023, reflecting a steady business expansion.
Restaurant Brands International has shown a commitment to returning value to shareholders, as evidenced by its track record of raising dividends for 9 consecutive years. This is further supported by the fact that the company has maintained dividend payments for 10 consecutive years, with a current dividend yield of 3.06%. These InvestingPro Tips highlight QSR's dedication to consistent dividend growth, which is an attractive feature for income-focused investors. Additionally, analysts predict that the company will remain profitable this year, reinforcing the positive outlook presented by Loop Capital.
For investors seeking a deeper analysis, there are additional PRONEWS24 InvestingPro Tips available, including insights into QSR's valuation multiples and profitability measures. By using the coupon code PRONEWS24, readers can get an extra 10% off a yearly or biyearly Pro and Pro+ subscription, unlocking a wealth of valuable investment information.
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