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Restaurant Brands International Inc QSR

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RBI Shares Fairly Valued as Canadian Pandemic Headwinds Persist; We Expect a Protracted Recovery

Sean Dunlop Equity Analyst

Analyst Note

| Sean Dunlop |

We're modestly raising our fair value estimate for narrow-moat Restaurant Brands International to $69 from $68 prior as we balance the impacts of time value, input cost inflation, and turnaround efforts in the Tim Horton's segment. Unlike most quick-service restaurant (QSR) peers, we expect RBI's recovery from COVID-19 to stretch into 2022, as extended lockdowns in Canada have weighed heavily on Tim Horton's results, though we continue to view pandemic-related demand shocks as largely transitory. Shares appear fairly valued.

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Company Profile

Business Description

Restaurant Brands International is one of the largest restaurant companies in the world, with $31 billion in 2020 systemwide sales across a footprint that spans more than 27,000 restaurants and 100 countries. The firm generates revenue primarily from retail sales at its company-owned restaurants, royalty fees and lease income from franchised stores, and from its Tim Horton’s supply chain operations. Formed in 2014 after 3G Capital’s acquisition of Tim Horton’s International, the Restaurant Brands portfolio now includes Burger King (18,700 units), Tim Horton’s (5,000 units), and Popeyes Louisiana Kitchen (3,575 units).

Contact
130 King Street West, Suite 300, P.O. Box 339
Toronto, ON, M5X 1E1, Canada
T +1 905 339-5724
Sector Consumer Cyclical
Industry Restaurants
Most Recent Earnings Mar 31, 2021
Fiscal Year End Dec 31, 2020
Stock Type —
Employees 5,200

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