RESTAURANT BRANDS INTERNATIONAL INC. (QSR): what the price assumes

boothcheck covers RESTAURANT BRANDS INTERNATIONAL INC. (QSR) but does not put one priced-in number on it: here the defensible answer is the evidence rather than a point estimate. boothcheck publishes no house fair value, target price, or buy/sell rating. Narrative composed 2026-06-28.

Generated: 2026-09-07 · Exported: 2026-09-09 · Source: https://boothcheck.com/report/QSR

Headline

FieldValue
TickerQSR
CompanyRESTAURANT BRANDS INTERNATIONAL INC.
Current price$80.17/sh
CompositionSupply chain sales 31% / Company restaurant sales 25% / Royalties 21% / Property revenues 9% / Franchise fees and other revenue 2% / Advertising revenues and other services 13%

What The Price Assumes (Inversion)

The assumption today's price embeds, recovered by inverting the valuation.

FieldValue
Inversion basiswhole-company
Operating margin (value-band context)8.0%
Operating margin today26.9%
Margin compression (value-band)-18.9pp
Multiple paid16x operating income

The operating-margin figure is value-band context at year 11: derived from the framework's value band, a separate calculation — not part of the priced-in solve.

The price sits below what even a 5%/yr operating-profit decline would warrant; the inversion reports a bound, not a solved growth path.

Solve inputs: computed at a 7% cost of capital with 4% terminal growth over a 5-year stage (computed at the 7% minimum rate; the CAPM rate 6.8% sits below it).

How unusual the bet is: within-range (limited comparison data)

ReferenceValue
vs own history-0.70σ
cohort percentile (of 212 peers)45

Valuation X-Ray

The price is justified by relative-multiple and growth-DCF; asset-based/earnings-power land below the price.

How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.

FamilyMedian price/FVModelsReads
Asset1.52x5expensive
Earnings3.18x4expensive
Relative0.60x2justifies
Growth0.99x4justifies

Families that justify the price: Relative, Growth Families that call it expensive: Asset, Earnings

The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 7.4%); the inversion above states its own rate.

Per-Model Detail (n=15)

ModelFamilyFVPrice/FVApplicableMethodology
DCF Perpetual GrowthGrowth$92.280.87xyesFCF base $1.7B, growth 7% (input: historical growth), terminal g 4.0%, WACC 7.4%, 5yr projection
DCF Exit MultipleGrowth$71.831.12xyesExit EV/EBITDA: 12.9x / 14.9x / 16.9x (bear / base = today's held flat / bull), 5yr
Relative ValuationRelativenoP/E 28x (static sector reference · 2026-04), scenarios: 23.5x / 28.0x / 32.5x (bear / base = reference held flat / bull), EV/EBITDA 18x
Simple DDMGrowthno
Two-Stage DDMGrowth$120.240.67xyesStage 1: 20% for 5yr, Stage 2: 3.5% perpetual
Simple Excess ReturnAsset$52.661.52xyesBV/sh $11.03, ROE (TTM) 44.2%, ke 9.3%
Two-Stage Excess ReturnAsset$132.760.60xyes5yr excess ROE then converge to ke=9.3%
Discounted Future Market CapGrowth$52.581.52xyesRev $9.7B, growth 7% (input: historical growth; tapered), Terminal P/S: 2.4x / 2.9x / 3.4x (bear / base = today's held flat / bull, cap 8x)
Peter Lynch Fair ValueRelative$129.850.62xyesEPS $3.71, growth 35% (input: historical EPS growth), PEG=0.47 (Undervalued)
Margin TrajectoryGrowthno
Earnings Power ValueEarnings$18.384.36xyesNormalized EBIT (5y avg op income, one-time charges added back) $2.17B × (1−21%) / WACC 7.4% → EPV (no growth)
Residual IncomeAsset$84.250.95xyesBV $11.03 + 5yr PV of (ROE (TTM) 44.2% − Kₑ 9.3%) × BV; BV grows 8.8%/yr
Graham NumberAsset$30.342.64xyes√(22.5 × EPS $3.71 × BVPS $11.03) — Graham's conservative floor
EV/EBITDA RelativeRelativenoEBITDA $2.91B × sector EV/EBITDA 18.0x
FCF YieldEarnings$6.3612.61xyesFCF $1632.0M / Kₑ 9.3% — zero-growth perpetuity
SBC-Adj FCF YieldEarnings$2.0339.49xyesSBC-adj FCF $1.49B (FCF $1.63B − SBC $0.14B) capitalized at Kₑ (excluded from median)
Ben Graham FormulaEarnings$119.710.67xyesEPS $3.71 × (8.5 + 2×15.0%) × (4.4 / 5.3%)
ROIC-Justified P/BAsset$4.3918.26xyesBV $11.03 × (ROIC 2.9% / WACC 7.4%)
P/Sales SectorRelativenoRevenue $9.70B × sector P/S 4.5x
PEG Fair ValueRelative$139.130.58xyesEPS $3.71 × (PEG 1.5 × growth 25.0% (input: historical EPS growth)) → PE 37.5x
Earnings YieldEarnings$40.112.00xyesEPS $3.71 / required return 9.3% (Rf 4.3% + ERP 5.0%)
Funds From Operations MultipleRelativeno
Clinical Phase NPVGrowthno
MertonAssetno
V5 Mechanicalno

Economic-Unit Decomposition (Sum Of The Parts)

One or more material disclosed units has unresolved economics. Unknown/general is not evidence of homogeneity: segment SOTP is primary but incomplete, consolidated cash flow may remain only a secondary cross-check when every unit shares an enterprise basis, and one sector multiple or target margin is withheld.

UnitRoleValuation basisRevenueReported profitValue evidenceStatus
Tim Hortons (TH)operatingenterprise$4.2b$1.1b operating-incomewithheldunresolved no unit value
Burger King (BK)operatingenterprise$1.5b$468.0m operating-incomewithheldunresolved no unit value
Popeyes Louisiana Kitchen (PLK)operatingenterprise$800.0m$250.0m operating-incomewithheldunresolved no unit value
Firehouse Subs (FHS)operatingenterprise$232.0m$56.0m operating-incomewithheldunresolved no unit value
Restaurant Holdings (RH)operatingenterprise$1.8b$44.0m operating-incomewithheldunresolved no unit value

No total common-equity value is stated. One or more material units lack a supported unit value. The displayed values are an indicative subtotal; consolidated debt and cash cannot be applied to a fraction of the company.

Solvency

FieldValue
Net debt$12.5b
Net debt / NOPAT (after-tax)6.06x
Net debt / operating income (pre-tax)4.79x
Share count CAGR (dilution)0.3%
Burning cashno

Interest expense is not separately reported in the latest filings, so interest coverage cannot be computed.

Bullet Takeaways

At $73.45 the price pays roughly 18 times company-wide operating income, and inverted it asks for essentially no growth at all (about minus 3% a year). For a franchisor targeting 8%-plus organic operating-income growth, the bar the price sets is undemanding.

The single number that frames everything is leverage. Net debt sits near $13.6 billion, close to six times trailing operating income. That is the financial reality behind a thin book value and an asset-light royalty model, and it is what makes the equity a leveraged claim on the brands rather than a clean compounder.

The brand portfolio is mixed but improving at the top. Q1 2026 comparable sales grew 3.2%, with Burger King US up 5.8% and Tim Hortons posting a 20th straight positive quarter, while Popeyes fell 6.5%. Relative and growth methods support the price; the asset and pure earnings-floor methods, distorted by the leveraged structure, do not.

Bull Case

The single most decisive metric here is organic adjusted operating-income growth, because for an asset-light franchisor that one number, more than comparable sales or unit count, drives the cash that services the debt and funds the buyback. In the first quarter of 2026 it ran at about 10.7%, and management reaffirmed it remains on track for 8%-plus organic operating-income growth for the full year. If that holds, the price is cheap: inverted, the $73.45 (June 28, 2026) quote asks for roughly minus 3% operating growth a year, so any positive compounding at all is upside against what the market is paying for.

The operating momentum is real where it matters most. Consolidated system-wide sales grew 6.2% in the first quarter of 2026, with comparable sales accelerating to 3.2%. Burger King US comparable sales surged 5.8%, a sharp reversal from a 1.1% decline a year earlier, and Tim Hortons delivered its 20th consecutive quarter of positive comparable sales. Those are the two largest profit engines in the portfolio, and both are working. The franchised, royalty-based model means that system-sales growth converts to high-margin royalty and supply-chain revenue without the company funding the restaurants directly.

The capital return underlines management's confidence. RBI resumed share repurchases in March 2026 and expects to buy back $500 million during the year. A franchisor that is growing operating income high-single-digits, accelerating comparable sales at its biggest brands, and returning cash, while the price embeds no growth, is the kind of mismatch the bull case is built on. The relative and forward methods agree: relative valuation lands near $79, EV/EBITDA near $72, and two-stage excess return near $63, all in the zip code of the price or above it, supporting the multiple a steady franchisor deserves.

Bear Case

Before any ratio, the qualitative problem is that this is a roll-up of four brands at very different points in their lifecycles, and the weak one is getting weaker fast. Popeyes same-store sales fell 6.5% in the first quarter of 2026, far worse than the roughly 1.5% decline analysts expected. A brand losing customers at that pace is not a rounding error inside a portfolio; it is a drag that the Burger King recovery has to carry, and it raises the question of whether the company's playbook travels across all four banners or only the ones currently in favor. A franchisor's value is the durability of its royalty stream, and a brand in a 6.5% comparable-sales decline is eroding exactly that.

Now the ratio that the qualitative picture points to: leverage. Net debt sits near $13.6 billion, roughly 5.7 times trailing operating income, financed through a term-loan structure whose covenants restrict the company's ability to incur liens, sell assets, pay dividends, and make investments, with pricing tied to a net first-lien leverage grid (FY2024 10-K, accession 0001618756-25-000087). That debt load is the reason the asset-based and earnings-floor methods produce values far below the price (the book-anchored simple excess return near $31, the Graham number near $23): the equity is a thin, levered slice on top of a large fixed claim. In a downturn, or a higher-for-longer rate environment that lifts refinancing costs, the leverage amplifies any operating disappointment.

The price-to-fundamentals disconnect is therefore two-sided. Strip the growth assumption back toward the Popeyes reality, or stress the cost of the $13.6 billion in debt, and the support thins. The price embeds steady franchisor compounding with manageable leverage; the bear case is simply that one of those two pillars, brand durability or balance-sheet headroom, cracks before the other compensates.

Valuation

Inverted, the price is undemanding. At $73.45 RBI trades at roughly 18 times company-wide operating income, which solves to operating growth of about minus 3% a year for five years at a 7% cost of capital (the model floors the rate at 7%, slightly above the CAPM rate). Each one-point change in the cost of capital moves the implied growth rate about 7.5 points. A price that asks for slightly negative growth from a franchisor guiding to 8%-plus organic operating-income growth is the definition of a within-range, even conservative, embedded assumption.

The methods split by family, and the split is structural to the business model. The relative family supports the price: relative valuation near $79, EV/EBITDA near $72. The growth family lands a bit below: perpetual-growth DCF near $59, exit-multiple DCF near $64, discounted-future-market-cap near $47. The asset and pure earnings-floor methods produce values far below: simple excess return near $31, Graham number near $23. Several earnings-floor methods (the zero-growth FCF-yield and ROIC-justified book methods) print near-zero values and should be disregarded; they break down on a highly leveraged, asset-light franchisor where book value and unlevered returns are not meaningful anchors. The blended central estimate that survives the screen is about $59.

The reconciliation: the price is justified by the relative multiple while the asset and earnings-power methods say it looks expensive on a static, leverage-distorted view. The decisive overlay is the balance sheet: net debt near $13.6 billion at about 5.7 times operating income means the equity is a leveraged claim, so the valuation is more sensitive to both operating growth and refinancing cost than the headline multiple suggests.

Catalysts

The most recent catalyst was the first-quarter 2026 report. Consolidated system-wide sales grew 6.2%, comparable sales accelerated to 3.2%, organic adjusted operating income grew about 10.7%, and adjusted EPS grew about 14.6%. Management reaffirmed it remains on track for 8%-plus organic operating-income growth for 2026, the single most important metric for the thesis, so each quarter's read on that figure is the key marker.

The brand-level catalysts cut both ways. Burger King US comparable sales surged 5.8%, reversing a prior-year decline, and Tim Hortons posted its 20th consecutive positive quarter. Against that, Popeyes same-store sales fell 6.5%, well below expectations, so the pace of any Popeyes turnaround is a swing factor worth watching closely. The durability of the Burger King US recovery is the other.

On capital return, RBI resumed share repurchases in March 2026 and expects to buy back $500 million during the year, a positive to track. The overriding risk is the balance sheet: with net debt near $13.6 billion, the cost and timing of refinancing, and any move in interest rates, are catalysts in their own right for a leveraged franchisor.

Sources: RBI Q1 2026 results (rbi.com, Yahoo Finance, kalkine.com, The Motley Fool).

Peer Cohorts (Per Segment, With Filing Citations)

Tim Hortons (TH) (reported)

Burger King (BK) (reported)

Popeyes Louisiana Kitchen (PLK) (reported)

Firehouse Subs (FHS) (reported)

Restaurant Holdings (RH) (reported)

Methodology Note

Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.

View the full interactive QSR report on boothcheck