QSR
Restaurant Brands International Inc.
$75.38
Stable Earnings Power
80%
P/Adj-EPS × Normalized Multiple
Moderate
·
Conviction
Undervalued
Trading 34.4% below fair value
You pay
$75.38
Bear
$96.27
Fair
$114.99
Bull
$133.72
Bear
$96.27
+27.7%
$4.65 × 23x P/E
Fair
$114.99
+52.5%
$4.65 × 28x P/E
Bull
$133.72
+77.4%
$4.65 × 32x P/E
Key Value Driver
Normalized P/E multiple (28x base case)
Implied Market Multiple
16.2x
Summary
Our base-case estimate uses a valuation based on adjusted earnings per share and a normalized price-to-earnings multiple. We then blend that result with the average analyst price target of $83.73 from 44 analysts, using a 30% weight on analyst consensus. That produces an estimated intrinsic value of $114.99 per share.
Warnings
The company's reported profits differ from official accounting profits by 98%. Check what costs are being left out of the adjusted number.
The company pays out 108% of its profits as dividends. That leaves little cushion — the dividend could be cut if business slows down.
Dividend-based valuation: $58.24 (below our primary estimate by 55%). Large gaps may signal the dividend doesn't reflect full earning power.
Wall Street's average price target is $83.73 (from 44 analysts). Our estimate is 53% above the consensus -- consider that gap carefully.
Key Risks
- Growth DCF inappropriate — terminal value assumptions dominate
- EV/EBITDA misleading for regulated businesses where capex is mandated
- Regulatory risk is a fat tail not visible in normal multiples