• If you are wondering whether Restaurant Brands International at around US$71.95 is offering fair value or not, you are not alone. That is exactly what this article will unpack for you.
• The share price sits at US$71.95, with returns of 6.5% over the past week, 7.4% over the past month, 6.1% year to date, 15.2% over 1 year, 23.4% over 3 years and 31.6% over 5 years. This naturally raises questions about what is already priced in and what might still be on the table.
• Recent news around Restaurant Brands International has focused on its role as the parent of several large quick service restaurant brands and ongoing efforts to sharpen brand positioning and operational consistency across its portfolio. This kind of context helps explain why investors may be reassessing both the potential rewards and the risks tied to the stock.
• Our model currently gives Restaurant Brands International a valuation score of 2 out of 6. This means it screens as undervalued on 2 of our 6 checks. Next we will look at how different valuation approaches line up on the stock before finishing with a more complete way to think about value overall.

Restaurant Brands International scores just 2/6 on our valuation checks. See what other red flags we found in the full valuation breakdown.

Approach 1: Restaurant Brands International Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow model looks at the cash the business is expected to generate in the future and then discounts those projections back to today to estimate what the company might be worth right now.

For Restaurant Brands International, the latest twelve month Free Cash Flow sits at about $1.34b. Using a 2 Stage Free Cash Flow to Equity model, analysts and Simply Wall St project Free Cash Flow reaching around $2.54b in 2030. The nearer term projections, such as $1.71b in 2026 and $1.94b in 2027, are based on analyst estimates, while the later years are extrapolated by Simply Wall St from those inputs.

When these future cash flows are discounted back to today, the model arrives at an estimated intrinsic value of about $82.98 per share, compared with the current share price of around $71.95. That implies the stock screens as roughly 13.3% undervalued on this DCF view.

Result: UNDERVALUED

Our Discounted Cash Flow (DCF) analysis suggests Restaurant Brands International is undervalued by 13.3%. Track this in your watchlist or portfolio, or discover 45 more high quality undervalued stocks.

Approach 2: Restaurant Brands International Price vs Earnings

For profitable companies, the P/E ratio is a useful shorthand for how much investors are paying for each dollar of current earnings. This makes it a practical cross check on the cash flow based view you saw in the DCF section.

What counts as a “normal” P/E often reflects the market’s expectations for earnings growth and the perceived risk around those earnings. Higher expected growth and lower perceived risk can support a higher P/E, while slower growth or higher risk usually leads to a lower multiple.

Restaurant Brands International currently trades on a P/E of about 27.6x. That sits above the Hospitality industry average of around 23.4x and also above the peer average of roughly 25.4x. Simply Wall St’s Fair Ratio for the stock is 32.3x, which is its proprietary view of what a justified P/E could be given factors such as earnings growth, industry, profit margin, market cap and risk profile.

The Fair Ratio is more tailored than a simple comparison with peers or the broad industry because it attempts to adjust for differences in growth, risk and profitability rather than assuming all companies should trade on the same multiple. With the current 27.6x P/E sitting below the 32.3x Fair Ratio, this framework points to Restaurant Brands International screening as undervalued on a P/E basis.

Result: UNDERVALUED

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Upgrade Your Decision Making: Choose your Restaurant Brands International Narrative

Earlier we mentioned that there is an even better way to understand valuation, so let us introduce you to Narratives, which are simply your story about a company linked directly to your own numbers for future revenue, earnings, margins and fair value. These are all brought together in an easy tool on Simply Wall St’s Community page that is used by millions of investors.

A Narrative connects how you see Restaurant Brands International, for example its franchise led international expansion, digital investments or cost and competition risks, to a specific forecast and then to a Fair Value. You can compare this with the current share price to help you decide whether the stock looks expensive or cheap for your purposes.

Because Narratives on Simply Wall St update automatically when new information such as news or earnings arrives, you can keep your story live and see how your Fair Value shifts over time. You can also compare your view with others, ranging from investors who think Restaurant Brands International could be worth closer to US$93 to those who see value nearer US$60.

Do you think there's more to the story for Restaurant Brands International? Head over to our Community to see what others are saying!

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.