4. Restaurant Brands International Inc. (NYSE:QSR)
Number of Hedge Fund Holders as of Q3: 29
Pershing Square’s Equity Stake: $1.66 Billion
Restaurant Brands International Inc. (NYSE:QSR) is a Canadian American multinational fast food holding company in Bill Ackman’s stock portfolio and one of the two restaurant-related stocks that the hedge fund has stakes in. As of Q3 2024, the hedge fund holds just over 23 million shares of the company valued at roughly $1.66 billion, down slightly from 23.14 million in Q2. Restaurant Brands International Inc. (NYSE:QSR) represents a solid 15.64% of Pershing Square’s portfolio, which held the largest stake in the company in Q3 2024.
Operating in more than 120 countries with 30,000 restaurants, Restaurant Brands International Inc. (NYSE:QSR) owns four prominent restaurant brands: Tim Hortons, Burger King, Popeyes, and Firehouse Subs. It was founded in 2014 with the merger of Tim Hortons and Burger King, and later acquired Popeyes in 2017, and Firehouse Subs in 2021. At the time of the merger, in Q3 of 2014, Pershing Square had a $1.14 billion stake in Burger King Worldwide which transformed into a $1.48 billion stake in Restaurant Brands International Inc. (NYSE:QSR) by Q4 of the same year.
Of the four brands that it owns, Burger King has seen a drop in sales in the US during 2024 due to broad price increases. QSR states that it would adopt a balanced approach to ensure profitability while appealing to customers. Josh Kobza, CEO of Restaurant Brands International Inc. (NYSE:QSR) maintained, “Our balanced approach to everyday value continues to resonate with guests and the team has reacted calmly in the face of heightened promotional activity across the industry.”
Restaurant Brands International Inc. (NYSE:QSR)’s Q3 revenue was 2.29 million with a year-on-year growth of annual sales of 3.2%. Its adjusted operated income of $652 million increased 6.1% organically as compared to the same quarter in 2023. Moreover, the company’s Q3 net restaurant growth expanded by 3.8% compared to the previous year despite cost inflation.
Restaurant Brands International Inc. (NYSE:QSR) offers a 3.67% dividend yield and has raised its dividend for 10 consecutive years. KeyBanc revised its outlook for the stock, decreasing the price target from $80 to $78 while maintaining an Overweight rating on the stock. This suggests that the current trading price of Restaurant Brands International’s stock does not accurately reflect the company’s growth potential in the long term.
However, Ackman’s investment in Restaurant Brands International Inc. (NYSE:QSR) is a sign of his optimism about the company’s prospects. The company has good long-term growth prospects since its brands are much less penetrated in the global market as are its competitors like McDonald’s or KFC.
Insider Monkey’s database indicated that 29 hedge funds out of the 900 funds held stakes in Restaurant Brands International Inc. (NYSE:QSR) as of the end of Q3 2024 as opposed to 22 in Q2.
Pershing Square stated the following regarding Restaurant Brands International Inc. (NYSE:QSR) in its second quarter 2024 investor letter:
“In light of weakening economic conditions and ongoing boycotts, the company lowered its net restaurant and system-wide sales growth outlook this year. In response, the company is enacting a cost savings program which will enable it to grow operating profits by more than 8%. While an uncertain environment may impact unit growth in the near-term, we believe each of the company’s brands will benefit in a slower economic environment with consumers trading down.”
