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Restaurant Brands International: An Industry Underdog to Watch

Stock MarketsSep 20, 2021 04:30PM ET
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© Reuters. Restaurant Brands International: An Industry Underdog to Watch

Restaurant Brands International (NYSE:QSR), the company behind such names as Burger King, Popeye's Louisiana Chicken, and Tim Hortons, looks a bit cheap.

Indeed, truly remarkable value is harder to come by on the S&P 500 these days. Even fast-food firms feeling the pressure of the latest Delta-driven COVID-19 surge don't come cheap these days.

Although Restaurant Brands has been a relative laggard of late, I remain optimistic about its trajectory from here and think the name is more than capable of catching up to its more expensive, better-performing competitors in the space. As such, I am bullish on QSR stock. (See QSR stock charts on TipRanks)

Restaurant Brands Trails the Pack

Despite ongoing COVID-19 pandemic-related disruptions, industry leaders like McDonald's (NYSE:MCD) and Chipotle Mexican Grill (NYSE:CMG) are still near their respective all-time highs, while QSR stock is still down over 20% from its all-time high.

What has McDonald's and Chipotle done right?

Each firm has focused on the things they could control in spite of dire circumstances. Whether we're talking about McDonald's and its celebrity collaborations, or Chipotle and its mighty delivery push, it's clear that both companies are capable of thriving, even if these on-and-off pandemic restrictions continue.

Of course, once this pandemic goes endemic, restaurant stocks across the board will stand to benefit. Until then, the formula for a rising fast-food stock is all about which firm has perfected the so-called "Three Ds": delivery, drive-thru, and digital apps (loyalty), and less about the fourth D: dining rooms.

Menu Innovation

Burger King recently announced its intent to ban 124 artificial ingredients from its menu. The burger giant is really pushing for a healthy reputation. It may very well give Chipotle something to worry about as it makes the push.

Popeye's, with its successful sandwich and Tim Hortons, with its new seasonal product categories, could also move the needle higher for QSR stock.

Wall Street's Take

According to TipRanks’ analyst rating consensus, QSR stock comes in as a Moderate Buy. Out of 15 analyst ratings, there are nine Buys, five Holds, and one Sell.

The average QSR price target is $74.04. Analyst price targets range from a low of $59 per share, to a high of $86 per share.

Disclosure: Joey Frenette owned shares of Restaurant Brands and McDonald's at the time of publication.

Disclaimer: The information contained in this article represents the views and opinion of the writer only, and not the views or opinion of TipRanks or its affiliates, and should be considered for informational purposes only. TipRanks makes no warranties about the completeness, accuracy or reliability of such information. Nothing in this article should be taken as a recommendation or solicitation to purchase or sell securities. Nothing in the article constitutes legal, professional, investment and/or financial advice and/or takes into account the specific needs and/or requirements of an individual, nor does any information in the article constitute a comprehensive or complete statement of the matters or subject discussed therein. TipRanks and its affiliates disclaim all liability or responsibility with respect to the content of the article, and any action taken upon the information in the article is at your own and sole risk. The link to this article does not constitute an endorsement or recommendation by TipRanks or its affiliates. Past performance is not indicative of future results, prices or performance.

Restaurant Brands International: An Industry Underdog to Watch
 

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