QSR (Update)

Restaurant Brands International, Inc.

Consumer


Presented:03/09/2018
Price:$59.33
Cap:$14.30B
Current Price:$71.21
Cap:$22.58B

Presented

Date03/09/2018
Price$59.33
Market Cap$14.30B
Ent Value$28.25B
P/E Ratio35.99x
Book Value$9.13
Div Yield1.42%
Shares O/S241.10M
Ave Daily Vol1,801,498
Short Int4.45%

Current

Price$71.21
Market Cap$22.58B
Restaurant Brands International, Inc. is a holding company, which engages in the operation of quick service restaurants. It operates through the following segments: Tim Hortons, Burger King, and Popeyes. The Tim Hortons segment provides donut, coffee, and tea restaurant services. The Burger King segment manages fast food hamburger restaurant. The Popeyes segment handles chicken category of the quick service segment of the restaurant industry. The company was founded on August 25, 2014 and is headquartered in Oakville, Canada.

Please note, this is an update to Long - Restaurant Brands International (QSR), presented on October 5, 2015 which was an update to Long - Restaurant Brands International (QSR) presented on November 5, 2014.

Publicly traded companies mentioned herein: Domino’s Pizza Inc (DPZ), Dunkin Brands Group Inc (DNKN), Jack in the Box Inc (JACK), McDonald’s Corporation (MCD), Restaurant Brands International Inc. (QSR), Sonic Corporation (SONC), Yum! Brands Inc (YUM)

Highlights

The presenter remains long shares of Restaurant Brands International (QSR), and sees the recent pullback from ~$67 to $60 as an attractive buying opportunity. He attributes the recent weakness in the share price to trends at Tim Hortons, but feels as though concerns are overblown. While it is unlikely that the value he sees on a sum-of-the-parts basis will ever be unlocked, if one assumes a reasonable value for Burger King (he rolls Popeyes into BK as it’s small, but growing rapidly) it leaves Tim Hortons trading at an unjustifiably depressed mid-teens multiple to cash flow. And, at just 20x his 2019 FCF/share forecast ($3.50 - $3.70), the base case upside is 20% - 25%.

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Idea Discussion

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