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Restaurant Brands International Inc. Just Beat EPS By 30%: Here's What Analysts Think Will Happen Next

Last week saw the newest full-year earnings release from Restaurant Brands International Inc. (NYSE:QSR), an important milestone in the company's journey to build a stronger business. Revenues were US$7.0b, approximately in line with whatthe analysts expected, although statutory earnings per share (EPS) crushed expectations, coming in at US$3.76, an impressive 30% ahead of estimates. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

Check out our latest analysis for Restaurant Brands International

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After the latest results, the 16 analysts covering Restaurant Brands International are now predicting revenues of US$7.47b in 2024. If met, this would reflect an okay 6.4% improvement in revenue compared to the last 12 months. Statutory earnings per share are forecast to reduce 4.4% to US$3.63 in the same period. In the lead-up to this report, the analysts had been modelling revenues of US$7.46b and earnings per share (EPS) of US$3.31 in 2024. So the consensus seems to have become somewhat more optimistic on Restaurant Brands International's earnings potential following these results.

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The consensus price target was unchanged at US$83.77, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. There are some variant perceptions on Restaurant Brands International, with the most bullish analyst valuing it at US$90.00 and the most bearish at US$74.00 per share. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Restaurant Brands International's past performance and to peers in the same industry. The period to the end of 2024 brings more of the same, according to the analysts, with revenue forecast to display 6.4% growth on an annualised basis. That is in line with its 6.0% annual growth over the past five years. Compare this with the broader industry (in aggregate), which analyst estimates suggest will see revenues grow 9.8% annually. So it's pretty clear that Restaurant Brands International is expected to grow slower than similar companies in the same industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Restaurant Brands International's earnings potential next year. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. The consensus price target held steady at US$83.77, with the latest estimates not enough to have an impact on their price targets.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have estimates - from multiple Restaurant Brands International analysts - going out to 2026, and you can see them free on our platform here.

Even so, be aware that Restaurant Brands International is showing 3 warning signs in our investment analysis , and 1 of those makes us a bit uncomfortable...

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.