The Street expects Restaurant Brands International, the parent of Burger King and Tim Horton restaurant chains, will this quarter report its tastiest earnings growth in at least two years.
On Monday, Restaurant Brands International stock got an IBD rating upgrade as its Relative Strength (RS) Rating jumped 12 points, from 62 to 74. The move puts the fast food and fast casual restaurant operator just below a key rating benchmark. The group itself ranks 43, meaning it's in the top quartile of the 197 industries IBD tracks.
Restaurant Brands Near Significant Milestone
The market's biggest winners typically have an RS Rating over 80 in the early stages of their moves. See if Restaurant Brands stock can close the six-point gap and hit that benchmark.
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Restaurant Brands operates four restaurant chains including burger and fries chain Burger King and coffeehouse and restaurant chain Tim Hortons. Also Popeyes chicken chain and Firehouse Subs.
On May 8, Restaurant Brands reported 3% first quarter earnings growth to 75 cents per share. Sales rose 21% to $2.11 billion. For the current quarter, analyst consensus is for the company's earnings to climb 12% year over year to 96 cents, according to FactSet. That would be its strongest growth in at least the last eight quarters. Sales growth is expected to ease from 21% last quarter to a still respectable 13%, for a record $2.34 billion.
The restaurant stock has risen sharply in the last four trading sessions. It trades well above both its 50-day and 200-day moving averages. It's 50-day is still below the 200. Watch for it to cross above the 200. QSR stock dropped to a 58.71 low on April 9 amid the market correction, and then turned upward sharply.
Restaurant Brands traded up about 1% Monday afternoon, a rise of about 22% in just over five weeks of trading. It's currently working on a consolidation with an 83.28 buy point. See if it can break out in heavy volume.
Owns Terrific Composite Rating
Among other ratings Restaurant Brands has a mild 73 Earnings Per Share Rating and an excellent 90 Composite Rating. IBD's Composite score combines five separate proprietary ratings into one. The best growth stocks have a Composite Rating of 90 or better. Additionally, a B Accumulation/Distribution Rating shows that funds were fairly heavy buyers of its stock over the last 13 weeks.
Restaurant Brands earns the No. 7 rank among its peers in the 55-stock Retail-Restaurants industry group. Dutch Bros, Texas Roadhouse and Darden Restaurants are among the top five highly rated stocks in the group.
IBD's proprietary RS Rating measures market leadership by using a 1 (worst) to 99 (best) score that identifies how a stock's price action over the last 52 weeks compares to the rest of the market.
This article was created automatically with Stats Perform's Wordsmith software using data and article templates supplied by Investor's Business Daily. An IBD journalist may have edited the article.
Please follow James DeTar on Twitter @JimDeTar
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