Is Restaurant Brands International Inc. (QSR) positioned for future growth?

Restaurant Brands International Inc. (NYSE: QSR) stock jumped 7.42% on Friday to $59.09 against a previous-day closing price of $55.01. With 3.5 million shares changed hands, the volume of the stock remained heavier than its average volume of 1.52 million shares. During the session, the Restaurants company that operates in wider Consumer Cyclical sector, reached to the highest price of $59.11 whereas the lowest price it dropped to was $57.29. The 52-week range on QSR shows that it touched its highest point at $66.54 and its lowest point at $46.68 during that stretch. It currently has a 1-year price target of $61.13. With its current market cap of 25.95 billion, QSR has annualized dividend of $2.16 while the current yield stands at 3.66%. Beta for the stock currently stands at 1.00.

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Price Performance and Earnings:

Stock performance is one of the indicators that investors use to determine whether they will profit from a stock. The price performance of QSR was up-trending over the past week, with a rise of 11.24%, but this was up by 15.12% over a month. Three-month performance surged to 8.80% while six-month performance rose 3.72%. The stock lost -9.51% in the past year, while it has lost -2.62% so far this year. A look at the trailing 12-month EPS for QSR yields 2.70 with Next year EPS estimates of 3.24. For the next quarter, that number is 0.73. This implies an EPS growth rate of 68.40% for this year and 10.28% for next year. EPS is expected to grow by 8.01% annually over the next five years; however, over the past five years, the company experienced an annual growth rate of 13.10%.

Float and Shares Shorts:

At present, 309.00 million QSR shares are outstanding with a float of 280.37 million shares on hand for trading. On Jul 14, 2022, short shares totaled 11.59 million, which was 3.75% higher than short shares on Jun 14, 2022. In addition to Mr. Jose E. Cil as the firm’s Chief Exec. Officer, Mr. Matthew Dunnigan serves as its Chief Financial Officer.

Institutional Ownership:

Through their ownership of 82.35% of QSR’s outstanding shares, institutional investors have majority control over the company. Other institutions hold 6.82% of QSR, in contrast to 49.67% held by mutual funds. Shares owned by individuals account for 29.32%. As the largest shareholder in QSR with 12.17% of the stake, Capital Research & Management Co holds 37,576,911 shares worth 37,576,911. A second-largest stockholder of QSR, Pershing Square Capital Managemen, holds 23,864,631 shares, controlling over 7.73% of the firm’s shares. Edgepoint Investment Group, Inc. is the third largest shareholder in QSR, holding 16,704,161 shares or 5.41% stake. With a 6.93% stake in QSR, the Pershing Square Holdings Ltd. is the largest stakeholder. A total of 21,389,922 shares are owned by the mutual fund manager. The American Funds Fundamental Invest, which owns about 3.79% of QSR stock, is the second-largest Mutual Fund holder. It holds 11,716,155 shares valued at 587.57 million. American Funds Income Fund of Ame holds 3.42% of the stake in QSR, owning 10,559,000 shares worth 529.53 million.

Analysts Ratings:

Reading analyst opinions is an effective way to decide where to invest, and there are several opinions available for QSR since 30 analysts follow the stock currently. There are 11 analysts who recommend BUY ratings, while 2 suggest SELL ratings. Of the remaining analysts, 14 believe that the stock is worth HOLDING, 2 give it an OVERWEIGHT rating, and 1 thinks that it’s UNDERWEIGHT. In the same way, a target price assigned to a stock can also reveal much about its potential. With QSR analysts setting a high price target of $75.00 and a low target of $50.00, the average target price over the next 12 months is $61.47. Based on these targets, QSR could surge 26.93% to reach the target high and fall by -15.38% to reach the target low. Reaching the average price target will result in a growth of 4.03% from current levels.

EPS: Estimates vs Actual

It is also common to use earnings estimates to evaluate a firm’s growth potential and to determine trading strategy. QSR will report FY 2022 earnings on 02/13/2023. Analysts have provided yearly estimates in a range of $3.13 being high and $2.64 being low. For QSR, this leads to a yearly average estimate of $2.95. The earnings surprise of a firm occurs when the actual results change from the consensus earnings estimate. Restaurant Brands International Inc. surprised analysts by $0.02 when it reported $0.64 EPS against a consensus estimate of $0.62. The surprise factor in the prior quarter was $0.05. Based on analyst estimates, the high estimate for the next quarter is $0.79 and the low estimate is $0.65. The average estimate for the next quarter is thus $0.73.

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