Restaurant Brands International Inc

Is Firehouse Subs publicly traded? Learn more about the restaurant chain now that Restaurant Brands International is acquiring it for $1 billion.

Valuation multiple Investors should look at valuation multiples when deciding whether to enter or exit a stock. Valuation multiples are driven by perceived growth, risk and uncertainties, and investors’ willingness to pay for a stock. There are various multiples to evaluate a stock. In this article, we’ll use the PE (price-to-earnings) ratio due to its […]

Wall Street analysts are expecting McDonald’s (MCD) to post EBIT of $2.1 billion in 3Q16. This represents an EBIT margin of 33.2% compared to 30.7% in 3Q15.

So far in this series, we’ve discussed McDonald’s (MCD) estimated revenue, sources of revenue, and estimated EBIT (earnings before interest and tax) margins.

Jack in the Box (JACK) and Restaurant Brands International (QSR) are analysts’ favorites among the companies we’ve reviewed in this series.

McDonald’s (MCD) is scheduled to announce its 3Q16 results on October 21, 2016. As of October 13, 2016, it was trading at $115.40, a fall of 9.4% from July 25.

In the last four quarters, McDonald’s has beaten analysts’ estimates. In 3Q16, analysts are expecting the company to post EPS of $1.48, a year-over-year rise of 6.1%.

In 2Q16, Wendy’s posted EBIT of $71.7 million—an EBIT margin of 18.7% compared to 13.3% in 2Q15. Analysts expected the EBIT margin to be 16.7%.

JACK, PZZA, and QSR are the most favored stocks in our group of eight fast-food restaurants, with no analyst recommending a “sell” for their stocks.

So far in 2020, Bill Ackman’s timing has been impeccable. He made over $2 billion by shorting stocks as US stock markets crashed in the first quarter.

More Americans are eating out, and they’re eating out more often. The restaurant industry’s share of the food dollar is 51%, up from 25% in 1955.

Bill Ackman has made a huge comeback in 2019.

McDonald’s (MCD) has posted EBIT (earnings before interest and tax) of ~$8.9 billion, which represents an EBIT margin of 38.8%.

MCD posted SSSG of 3.8%, 1.5%, -1.0%, and 0.2% in 2016, 2015, 2014, and 2013, respectively.

In 2017, McDonald’s (MCD) posted revenues of ~$22.8 billion, which represents a fall of 7.3% from ~$24.6 billion in 2016.

Revenue expectations In 2018, analysts expect McDonald’s (MCD) to post revenue of $21.1 billion, which represents a fall of 7.7% from its revenue of $22.8 billion in 2017. As part of its optimizing strategy, McDonald’s has been refranchising its company-owned restaurants. The refranchising is expected to lower the company’s revenue in 2018. However, some of […]

The initiatives taken by Wendy’s management to drive SSSG appear to have led to a rise in WEN stock and a higher valuation multiple.

For 2018, analysts are expecting Wendy’s (WEN) to post revenue of $1.3 billion, which represents a growth of 2.6%.

Wendy’s (WEN) posted SSSG (same-store sales growth) of 1.3% in the North American region compared to 0.8% in 4Q16.

As of October 25, 2017, McDonald’s was trading at a forward PE multiple of 23.66x compared to 23.57x before the announcement of 3Q17 earnings.

Wendy’s (WEN) has been trading above its peers’ valuation multiple.

As of May 24, 2017, McDonald’s was trading at a PE multiple of 22.6x—compared to 21.3x before the announcement of its 1Q17 earnings.

As of April 19, 2017, McDonald’s was trading at a PE multiple of 21.1x, as compared to 19.9x before the announcement of its 4Q16 earnings.

As of September 16, 2016, these five fast food restaurants were trading at a median PE multiple of 21.4x.

Wendy’s (WEN) posted its 2Q16 results on August 10, 2016. The company posted adjusted EPS (earnings per share) of $0.11 on revenue of $382.7 million.

In 2Q16, McDonald’s revenue declined by 3.6% from $6.5 billion to $6.3 billion.

According to Bloomberg, of the ten analysts surveyed, 45.5% have issued “buy” recommendations for Wendy’s, while 50% have issued “hold” recommendations.

According to a Bloomberg survey of 16 analysts, 62.5% have given “buy” recommendations for JACK, and 37.5% have given “hold” recommendations.

SSSG is an important metric for investors to monitor because it increases a fast-food company’s revenue without increasing capital investment.

Wendy’s Company (WEN) generates its revenue through company-owned restaurant sales, franchisee fees, rental income, and royalty collected from franchisees.

In 4Q15, MCD, YUM, WEN, QSR, JACK, SONC, PZZA, and DPZ generated an average revenue of $189 per square foot.