What’s Driving Fast Food Restaurant Stock Prices?
Fast food restaurants
With the majority of fast food restaurants having posted their 2Q17 earnings, it’s time to compare the results. In this series, we’ll focus on the 2Q17 performance of McDonald’s (MCD), Jack in the Box (JACK), Wendy’s (WEN), and Restaurant Brands International (QSR).
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Restaurant Brands International has outperformed other fast food companies with returns of 7.8% since the announcement of its 2Q17 earnings on August 2, 2017. The company posted adjusted EPS (earnings per share) of $0.51 against analysts’ estimate of $0.45, which led to a rise in the company’s stock price.
Restaurant Brands International is followed by Jack in the Box, which has returned 6.8% since the announcement of its 2Q17 earnings on August 9, 2017. Despite posting lower-than-expected 2Q17 earnings, the company’s stock rose due to the improvement of same-store sales growth (or SSSG).
Jack in the Box is followed by McDonald’s, which has returned 3.7% since the announcement of its 2Q17 earnings on July 25, 2017. The company’s 2Q17 earnings outperformed analysts’ estimated revenue and EPS, which led to a rise in its stock price.
Wendy’s return was the lowest among the four companies at 2.3%. In 2Q17, the company posted EPS of $0.15 against analysts’ expectations of $0.13.
2017 has been a good year for fast food companies with three of the four companies we’re discussing giving positive returns. Since the beginning of 2017, Restaurant Brands International, McDonald’s, and Wendy’s have returned 34.0%, 29.4%, and 15.2%, respectively. However, during the same period, the stock price of Jack in the Box has fallen 9.5%.
In this series, we’ll compare the fundamental metrics of four fast food restaurants in 2Q17. Also, we’ll look at analysts’ estimates for the next four quarters. Finally, we’ll wrap up this series by looking at the companies’ valuation multiples and analysts’ recommendations.
First, let’s start by comparing the companies’ revenue growth in 2Q17.