Oppenheimer: Restaurant Brands International Is A 'Powerhouse'

In a report published Thursday, Oppenheimer analyst Brian Bittner initiated coverage of Restaurant Brands International Inc QSR with a Perform rating and no assigned price target.

According to Bittner, the company which was born out of the December 2014 merger of Burger King and Tim Hortons offers investors "robust fundamentals, attractive revenue/cost synergies and a more "investable" float.

"Fundamentals are rock-solid," Bittner wrote. "Same-store sales at Burger King and Tim Hortons rose 2 percent and 3 percent, respectively in 2014, with drivers for continued momentum."

However, Bittner noted that as a 100 percent franchised-model, any future earnings surprises relies on fixed cost reductions and post-merger synergies. The core fundamentals coupled with 3G's influence on cost reductions and unit growth acceleration at Tim Hortons is overshadowed by the fact that earnings upside is limited and valuation is "full."

Bottom line, the analyst stated that without a near-term upside theme, investors need a longer-term approach and conviction that Tim Hortons' international expansion will succeed under the company's brand.