Restaurant Brands International Surpasses Earnings Expectations
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 6 days ago
0mins
Should l Buy QSR?
Source: Newsfilter
Restaurant Brands International's stock fell 5.05% as it crossed below the 5-day SMA, reflecting a challenging market environment.
The company reported adjusted earnings of 96 cents per share, exceeding Wall Street's expectation of 95 cents, with revenue reaching $2.47 billion, surpassing the anticipated $2.41 billion. This strong earnings report indicates robust international growth, although the stock's decline suggests sector rotation amid broader market conditions.
Despite the earnings beat, the mixed performance among its brands, particularly Popeyes' decline, raises concerns about future growth. The company plans to share more growth strategies during its investor day on February 26, which could provide further insights into its expansion plans.
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Analyst Views on QSR
Wall Street analysts forecast QSR stock price to rise
15 Analyst Rating
10 Buy
4 Hold
1 Sell
Moderate Buy
Current: 68.130
Low
64.00
Averages
78.53
High
86.00
Current: 68.130
Low
64.00
Averages
78.53
High
86.00
About QSR
Restaurant Brands International Inc. is a quick-service restaurant company. It franchises and operates quick-service restaurants serving coffee and other beverage and food products. Its segments include Tim Hortons (TH), Burger King (BK), Popeyes Louisiana Kitchen (PLK), Firehouse Subs (FHS), International (INTL) and Restaurant Holdings. Tim Hortons is a coffee and baked goods restaurant chain in North America. Tim Hortons restaurants also serve a variety of hot and cold specialty beverages alongside breakfast, lunch and dinner offerings, including sandwiches, wraps, flatbread pizzas, and more. Burger King is a quick-service hamburger restaurant chain and is Home of the Whopper. Burger King restaurants feature flame-grilled hamburgers, chicken and other specialty sandwiches. Popeyes is a quick-service chicken concept, and delivers guests a Louisiana-style menu featuring fried bone-in chicken, chicken sandwiches, chicken tenders, wings, fried shrimp and regional items.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Portfolio Adjustments: The fund completely exited its position in PagSeguro Digital in Q4, indicating a strategic portfolio adjustment likely based on market performance and future expectations.
- Top Holdings: As of December 31, Restaurant Brands International remains Baupost's largest holding, indicating sustained confidence in the restaurant sector, and it was also the top holding in Q3, showcasing stability.
- Market Performance Comparison: Amazon was the worst-performing stock among the Magnificent Seven in 2025, and Baupost's investment decision may be based on optimism regarding its cloud segment growth, which will test the effectiveness of Klarman's strategy against Buffett's reduction in exposure.
See More
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- Position Changes: The fund also increased its stake in Amazon by 65% while reducing exposure to Alphabet, indicating a strategic reassessment of tech stocks and a shift in investment focus.
- Positive Market Outlook: Pershing Square's investment presentation highlighted that Meta's stock is undervalued, emphasizing its leadership in digital advertising and AI integration as key drivers for long-term growth, attracting more investor interest.
- Growing User Base: With 3.5 billion daily active users, Meta's strong user base and experienced leadership team provide robust support for its future market performance, further boosting investor confidence.
See More
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- New Investment Position: Baupost Group established a new position in Amazon worth $489.7 million in Q4, making it the firm's second-largest holding, despite the stock's 13% decline year-to-date amid tech sector struggles.
- Market Environment Challenges: Amazon is over 22% off its recent high and entered a bear market last week, reflecting concerns about the tech sector's high valuations and its ability to deliver on lofty AI promises.
- Value Investor Dilemma: Klarman, a value investor, has faced challenges over the past decade, particularly in a low-interest-rate environment where growth stocks dominated the market, although many analysts remain bullish on Amazon, believing its higher spending is justified.
- Other Investment Moves: Baupost also took new stakes in Grupo Aeromexico and Molina Healthcare, both of which are down over 12% and 21% year-to-date, respectively, while reducing its allocation to Restaurant Brands International and Alphabet.
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- Strong Financial Performance: In 2025, Restaurant Brands International achieved an 8.3% organic AOI growth and a 10.7% increase in adjusted EPS to $3.69 per share, demonstrating robust execution and market adaptability, which further solidifies its competitive position in the restaurant industry.
- Expansion in China: The company plans to increase Burger King locations in China to at least 2,500 by 2030, indicating a strong commitment to the Chinese market and a long-term investment strategy that is expected to significantly enhance brand market share in the Asia-Pacific region.
- Leadership Restructuring: Popeyes appointed Peter Perdue as President for the U.S. and Canada, aiming to improve operational consistency and performance, reflecting the company's focus on brand management and proactive response to market challenges.
- Optimistic Future Outlook: The company expects to achieve an 8% AOI growth for the fourth consecutive year in 2026, and despite pressures from rising beef costs, management is confident in future profitability and shareholder returns through enhanced operations and capital allocation.
See More
Restaurant Brands Reports Q4 Highlights
- Revenue Growth: Total revenue for 2025 reached $9.434 billion, up 13.4% from $8.406 billion last year, indicating robust market performance despite challenges in profitability.
- Earnings Performance: The adjusted EPS for Q4 was 96 cents, exceeding the 95 cents estimate, although GAAP EPS fell from 79 cents last year to 60 cents, reflecting volatility in the company's earnings capacity.
- Cash Flow and Debt: Operating cash flow for 2025 was $1.714 billion with free cash flow at $1.449 billion, while total debt stood at $13.669 billion, resulting in a net leverage ratio of 4.2x, indicating financial structure pressures.
- Dividends and Outlook: The company declared a Q1 2026 dividend of $0.65 per share, up from $0.62 in the previous quarter, with a 2026 annual dividend target of $2.60 per share, demonstrating confidence in future cash flows.
See More
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- Restaurant Brands Challenges: Despite reporting revenue and profit beats, Restaurant Brands' shares fell 6%, primarily due to rising costs, including beef, which pressured profits, reflecting the dual challenges of intensified industry competition and cost pressures.
- Cognex Stock Surge: Cognex shares jumped over 37% after reporting adjusted earnings and revenue beats for the fourth quarter, along with optimistic guidance for the current quarter, showcasing significant advancements in AI-enabled industrial machine vision technology.
- Equinix Exceeds Guidance: Equinix shares rose 12% after projecting adjusted EBITDA of $5.141 billion to $5.221 billion by 2026, surpassing analyst expectations, demonstrating strong growth potential in the digital infrastructure sector.
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