Truist Securities Lowers Price Target for Restaurant Brands International to $87 Amidst Sales Analysis
On Tuesday, Truist Securities revised its price target for Restaurant Brands International (NYSE: QSR), adjusting it downwards to $87 from the previous target of $90, while maintaining a Buy rating on the stock. The adjustment follows an analysis of the second-quarter sales data for the U.S. Burger King segment, estimating it at $2.79 billion with a same-store sales growth of 2.1%.
The analyst from Truist Securities observed a trough in year-over-year growth in May, followed by a modest improvement in June coinciding with the launch of Burger King's '$5 Your Way' promotion. However, sales growth slowed down by the end of June. Looking ahead to July, the analyst anticipates that the ongoing marketing efforts and the upcoming Fiery menu launch will help boost sales.
With these factors in mind, Truist Securities has adjusted its second-quarter adjusted EBITDA estimate for Restaurant Brands International to $708.4 million, down from the previous estimate of $716.3 million. This new forecast falls short of the consensus estimate, leading to the revised price target of $87 based on updated sales and EBITDA projections.
In other news, Restaurant Brands International has been making strategic acquisitions, including the recent purchase of Carrols Restaurant Group, the largest Burger King franchisee in the U.S., for around $1 billion. Analyst firms like UBS, Goldman Sachs, TD Cowen, Deutsche Bank, and KeyBanc Capital Markets have provided positive feedback on the company's performance.
Goldman Sachs projects earnings per share of $3.83 and $3.1 billion in EBITDA for Restaurant Brands by 2025. Burger King has also launched a new $5 value meal deal to remain competitive in the fast-food market.
InvestingPro Insights
Considering Restaurant Brands International's recent performance, InvestingPro data and tips offer valuable insights for investors. With a market capitalization of $31.51 billion, QSR's P/E ratio is 17.86, showing a slight decrease to 17.36 on an annual basis. The company's track record of increasing dividends and low price volatility may attract income-focused and stability-seeking investors.
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In conclusion, Restaurant Brands International's stock performance, strategic acquisitions, and positive analyst ratings suggest a potential for growth and stability in the long term. Investors looking for income potential and stability may find QSR an attractive investment opportunity.