On Thursday, Deutsche Bank (ETR:DBKGn) adjusted its outlook on Restaurant Brands (TSX:QSP_u) International (NYSE:QSR) shares, increasing the price target from $87.00 to $90.00. The firm sustained its Buy rating for the company's stock.
The adjustment follows Restaurant Brands International's recent earnings report, which revealed a robust first quarter with strong sales across all segments.
The company's earnings per share (EPS) and earnings before interest, taxes, depreciation, and amortization (EBITDA) aligned with expectations, aside from the timing of investments in Burger King.
The analyst from Deutsche Bank highlighted the company's performance, noting the impressive same-store sales (SSS) growth in both domestic and international markets. This growth was seen as indicative of a positive trend driven by effective sales strategies.
Restaurant Brands International also saw improved profitability among home market franchisees in the first quarter of 2024. The company is on track to boost its unit growth to a mid-4% range throughout the year.
The analyst expressed confidence in the company's ongoing improvement and suggested that there could be potential for upward revisions to financial forecasts and an expansion of the stock's multiple.
InvestingPro Insights
Restaurant Brands International (NYSE:QSR) has demonstrated a consistent financial performance, as reflected by its steady dividend growth, with dividends raised for 9 consecutive years and maintained for 10 consecutive years. This commitment to shareholder returns is noteworthy for investors seeking stable income. According to InvestingPro data, the company has a market capitalization of $32.95 billion and a P/E ratio of 19.55, which adjusts to 18.15 when looking at the last twelve months as of Q1 2024. The PEG ratio for the same period stands at 1.28, suggesting that the stock may be trading at a premium relative to its earnings growth.
Despite a high Price / Book multiple of 11.1, which could indicate a premium valuation, analysts remain optimistic about the company's profitability, expecting positive earnings this year. The company's revenue grew by 7.93% over the last twelve months as of Q1 2024, indicating healthy top-line performance. Furthermore, the gross profit margin during this period was a robust 39.77%, showcasing the company's ability to maintain profitability.
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