Restaurant Brands Earnings: Largely as Expected, Shares Slightly Cheap

We’ve raised our fair value estimate of RBI stock.

Sean Dunlop 14 February, 2025 | 4:30PM
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A Restaurant Brands International Inc. (RBI) logo is seen on a smartphone screen and in the background.

Key Morningstar Metrics for Restaurant Brands International


What We Thought of Restaurant Brands International’s Earnings

Restaurant Brands International QSR reported fourth-quarter results in line with our expectations. We’ve raised our fair value estimate to C$107 per share to reflect time value and currency movement. The stock trades slightly cheaply, making RBI one of our top picks in an industry with few undervalued opportunities. For investors with stronger stomachs and a desire for more upside, we recommend narrow-moat Papa John’s, which trades 35%-40% below our USD 67 fair value estimate amid its turnaround.

RBI generated $2.30 billion in revenue and $0.79 in diluted earnings per share in the quarter, in line with our $2.29 billion and $0.79 respective estimates. Strength in Tim Hortons Canada and the international segment was particularly encouraging; systemwide sales grew 3.2% and 11.2%, respectively. We continue to view the international segment as the jewel of RBI’s business and expect 9% average annual revenue growth for that unit over the decade to come, having seen its share of consolidated EBITDA swell to 37% in 2024 from 24% in 2023.

The turnaround of the Burger King US segment is progressing to plan, with refranchising of the more than 1,000 stores acquired from Carrols Restaurant Group set to begin in 2025, roughly two years ahead of schedule. While the market tends to be allergic to capital investment from franchisors, we view the move as a competitive necessity, as cash-strapped franchisees are unlikely to participate in store remodeling at a tolerably quick rate without corporate support. We expect 2.5% average annual growth for Burger King US over the decade to come, consistent with modest market share losses but still a sharp improvement from recent years. As refranchising progresses over the next decade, we view high 30s operating margins as achievable, consistent with wide-moat competitor Yum Brands.


The author or authors do not own shares in any securities mentioned in this article. Find out about Morningstar's editorial policies.

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Sean Dunlop  is an equity analyst on the consumer team for Morningstar Research Services LLC, a wholly owned subsidiary of Morningstar, Inc.

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