Daily Share Chat: Restaurant Brands

Restaurant Brands' latest profit upgrade suggests the recent sales momentum from the KFC business has caught even the company by surprise, says First NZ Capital analyst Sarndra Urlich.

"There is continued evidence that the traction from the already transformed stores is real and long-lasting," Urlich says.

"Add to that a further 30 transformed stores over the next few years and Restaurant Brands could very well enjoy further ‘super growth' from the KFC brand."

Urlich has upgraded her forecast earnings for the year ending February 28 from $16.2 million to $18.2 million and her 2011 forecast from $17.1 million to $19.1 million.

"The reasons for not buying Restaurant Brands in the past are long gone (including no revenue growth, aggressive gearing, ongoing profit warnings etc.)."

Urlich says she doesn't believe the reason for recent growth is purely a function of the ‘buying down' phenomenon during a recession. "Restaurant Brands is also reaping the benefits of effective management and has every chance of further surprising on the upside."

She has upgraded her valuation and 12-month target price for the shares from $1.57 to $1.84 and says she believes "it is not too late to jump on board, notwithstanding the stellar performance of the stock since the beginning of 2009."

BROKER CALL:  First NZ Capital rate Restaurant Brands as outperform.

Comments from our readers

No comments yet

Add your comment:

Your name:
Your email:	Not displayed to the public
Comment:
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Anti-spam verification:

Type the text you see in the image into the field below. You are asked to do this in order to verify that this enquiry is not being performed by an automated process.

Related News:

Restaurant Brands' 2Q sales rise 6.2 percent , led by Carl's Jr outlets
Is this the beginning of end for Starbucks?
Restaurant Brands bets on new brands to drive future earnings growth
Restaurant Brands expects 2014 profit will be marginally ahead of 2013
Restaurant Brands lifts 1st quarter sales 3.9 percent after adding Carl's Jr stores
Restaurant Brands scotches talk of buying Western Australian KFC stores
Restaurant Brands annual profit slips 4.5 percent, sees bigger earnings in 2013
Restaurant Brands 4th-qtr sales rise 4.5 percent as Carl's Jr makes up for Starbuck’s dip
Restaurant Brands 3Q sales creep higher
Restaurant Brands predicts flat annual profit, holds interim dividend