Restaurant Brands International (QSR) Stock May Be 14% Undervalued Despite Q2 Earnings Beat
Restaurant Brands International stock has returned 39.4% over the past five years, and today the valuation checks suggest the shares may still trade below an estimate of intrinsic value based on a Discounted Cash Flow (DCF) model and earnings multiples.
- Over five years, the 39.4% total return points to steady value creation for shareholders that now needs to be weighed against what the current price implies.
- Execution on Burger King’s ongoing refurbishment and menu upgrade plan can support expectations for future cash flows, while weaker trends at brands like Popeyes may limit how much value investors are willing to ascribe to the whole portfolio.
- On Simply Wall St’s broader checks, Restaurant Brands International screens as undervalued on 4 of 6 measures. This is a mixed picture rather than a clear bargain or clear overvaluation, and you can see the detail behind that score at 4/6.
The stock’s next move may depend on whether the current share price already reflects the cash flow outlook implied by the intrinsic value estimate, or if there is still a meaningful gap for investors to consider.
Is Restaurant Brands International Still Cheap on Cash Flow?
The Discounted Cash Flow (DCF) model values Restaurant Brands International by projecting future free cash flows and discounting them back to today. On this approach, the company generated last twelve month free cash flow of about $1.6b, and the model assumes those cash flows keep growing rather than shrinking. That stream of cash is used to arrive at an estimated intrinsic value of about $87 per share.
Compared with the current share price, that estimate points to the stock trading at roughly a 13.8% discount, so Restaurant Brands International screens as undervalued on this cash flow view. Because the Q2 2026 earnings beat was driven largely by Burger King’s strong US sales, while Popeyes and Tim Hortons were softer, the mixed brand performance helps explain why the market still prices the shares below the DCF estimate.
On balance, the discounted cash flow work suggests Restaurant Brands International stock currently looks undervalued relative to its projected cash generation.
Our Discounted Cash Flow (DCF) analysis suggests Restaurant Brands International is undervalued by 13.8%. Track this in your watchlist or portfolio, or discover 49 more high quality undervalued stocks.
Does Restaurant Brands International Look Undervalued on Earnings?
The P/E ratio is a useful way to see what investors are currently paying for each dollar of Restaurant Brands International earnings. Right now the stock trades on a P/E of about 18.7x.
That sits below both the hospitality industry average of roughly 22.1x and the peer group around 21.4x. On Simply Wall St’s fair multiple, which factors in Restaurant Brands International size, margins, industry and risk profile, the stock might trade closer to 25.3x. Compared with the current 18.7x P/E, this suggests a sizeable valuation gap that is more than a small discount to sector norms.
Even after the Q2 2026 earnings beat and stronger Burger King performance, the market is still pricing Restaurant Brands International at a P/E that sits well below this fair multiple estimate.
On this earnings multiple view, Restaurant Brands International stock currently appears undervalued.
See what the numbers say about this price — find out in our valuation breakdown.
The Restaurant Brands International Narrative: What Would Justify Today's Price?
Simply Wall St Narratives pick up where this valuation puzzle for Restaurant Brands International leaves off. They spell out which assumptions on growth, margins and earnings would need to hold for the stock to be worth materially more or less than today’s price. Each one turns its fair value into a clear thesis about the business that you can revisit over time to see how it holds up against new information.
You can add your voice to the Simply Wall St community by sharing a number driven Narrative on Restaurant Brands International that sets out your view on whether Burger King’s recent US sales strength and the wider brand mix support today’s price. Put your thesis on the record now and see how it stacks up as new results and updates arrive.
Do you think there's more to the story for Restaurant Brands International? Head over to our Community to see what others are saying!
The Bottom Line
Restaurant Brands International screens as undervalued on both the Discounted Cash Flow (DCF) intrinsic value estimate and the earnings multiple view, although the broader checks are mixed rather than emphatic. The crux is whether the cash flows that underpin that intrinsic value and the current P/E gap can hold up as the different brands move at different speeds. For investors, the key question is whether the current discount reflects a genuine opportunity or a sensible cushion for execution risk around Burger King’s refurbishment plan and softer trends at the other banners.
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.
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