Analyst Upgrades Restaurant Brands On Burger King Brand's Strong Comeback

  • TD Cowen analyst upgraded the shares of Restaurant Brands International Inc QSR from Market Perform to Outperform and raised the price target from $72 to $75.
  • The analyst is bullish about Burger King's (BK) U.S. same-store sales upside under a new chairman & new CEO as a capable brand president is granted autonomy to turn around the brand. 
  • The new CEO Josh Kobza is enacting a cultural change to allow greater autonomy for brand presidents that analyst expects to benefit BK U.S.
  • Restaurant Brands seeks to turn around Burger King U.S. sales & improve franchisee profitability, noted the analyst. Therefore, the analyst raised BK U.S. 1Q23 & 2023 same store sales to 8% & 4.5% from 4.5% & 3.3%, and versus 4.9% & 3.3% Consensus Metrix, respectively. 
  • The analyst thinks improvement in BK's U.S. performance would allow the stock to get more credit for stronger performing segments, including Tim's Canada and BK International.
  • The analyst infused confidence saying the worst is behind BK U.S. as the brand navigates the early stages of a turnaround after underperformance from 2018-2022.
  • The analyst added that the shares present a favorable risk/reward set-up given greater than 1:1 upside to downside ratio.
  • The shares present a favorable risk/reward set-up given greater than 1:1 upside to downside ratio.
  • Price Action: QSR shares are trading higher by 2.56% at $66.89 on the last check Friday.
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