Market Overview

Will Short Sellers Hang On To Restaurant Brands International?

Will Short Sellers Hang On To Restaurant Brands International?
  • Credit Suisse and other analysts are bullish on this restaurant operator.
  • Yet short sellers have been betting heavily against the stock.
  • Its share price has seesawed in the past few weeks.

Credit Suisse found reason to be bullish on Restaurant Brands International Inc (NYSE: QSR). Hence its upgrade of the stock on Thursday. However, short sellers have taken a different view. They have been increasing their bets on the parent company of Burger King, Popeye's Louisiana Kitchen and Tim Hortons all summer.

Credit Suisse analyst Jason West upgraded the stock to Outperform from Neutral, along with a price target lifted from $60 to $74. Several catalysts were mentioned to support the bullish stance, including accelerated growth at its most recent acquisition and a likely one-time special dividend. Oppenheimer cited similar catalysts recently for making QSR one of its top picks.

See also: JPMorgan Says GE's Outlook Is 'Worse Than We Think'

On the other hand, short interest in the stock has been rising since May. Between the July 31 and Aug.15 settlement dates, this Ontario-based quick service restaurant chain saw the number of its shares short jump almost 14 percent to more than 6.68 million. That represents 2.9 percent of the total float, and it was the highest level of short interest in the past year. At the average daily trading volume as of mid-August, it would take more than five days to cover all short positions.

QSR shares rose more than 4 percent during the latest short interest period, when the company reported quarterly results that fell short of consensus estimates but also announced the expansion of Tim Hortons to Spain. However, the share price ended the two-week period only fractionally higher, while the S&P 500 saw a fractional retreat in that time. The stock has risen more than 4 percent again in the past week, most of that gain on Thursday. The consensus recommendation of analysts polled by Thomson/First Call is to hold the shares.

Related Link: 4 Catalysts Driving A Bullish View On Restaurant Brands

Latest Ratings for QSR

Oct 2019MaintainsMarket Perform
Sep 2019UpgradesUnderperformNeutral
Sep 2019Initiates Coverage OnBuy

View More Analyst Ratings for QSR
View the Latest Analyst Ratings

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