Justin Bieber reprises collab with Tim Hortons! Time to buy QSR stock?

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Justin Bieber reprises collab with Tim Hortons! Time to buy QSR stock?

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Justin Bieber reprises collab with Tim Hortons! Time to buy QSR stock?
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Highlights

  • Tim Hortons is expanding its partnership with singer Justin Bieber, the Restaurant Brands International (TSX: QSR) subsidiary said on Wednesday, May 17.
  • This collab is set to launch Biebs Brew at Tims restaurants in Canada and the US next month.
  • Restaurant Brands reported revenue of US$ 1.45 billion in Q1 f FY2022.

Canadian singer Justin Bieber is set to reprise his collaboration with Tim Hortons, the Restaurant Brands International (TSX: QSR) subsidiary said on Wednesday, May 17. This second collab is set to launch a new line of beverages called Biebs Brew at Tims restaurants in Canada and the United States next month on June 6.

Last year, Tim Horton collaborated with the Grammy winner for TimBiebs Timbits, which the company said exceeded its expectations and was a “huge success”. TimBiebs is set to return to the market as well, said the firm.

With this new launch in line, Will Tim Hortons’ parent company Restaurant Brands International see a flutter in its stock prices? Let’s see its past performance first.

Restaurant Brands International Inc (TSX: QSR) 's Q1 FY2022

Restaurant Brands reported total revenue of US$ 1.45 billion and a net income of US$ 270 million in the first quarter of FY2022. The restaurant chain slightly increased its diluted earnings per share (EPS) to US$ 0.50 in the first quarter of FY2022 compared to C$ 0.58 a year earlier.

The quick-service restaurant company recorded system-wide sales growth across its brands – Tim Hortons (12.9 per cent), Burger King (16.5 per cent), Popeyes (4.1 per cent) and Firehouse Subs (7.4 per cent) in the latest quarter.

QSR's net leverage ratio was 5.5 in Q1 2022 compared to 6 in Q1 2021. Its net debt grew to US$ 12.58 billion in the latest quarter, higher than US$ 11.4 billion in the same period of 2021. In addition, Restaurant Brands is also set to pay a quarterly dividend of US$ 0.54 on July 6.

Restaurant Brands (TSX: QSR)’s Q1 2022 results

Also read: Is Canadian Tire (CTC.A) stock for beginners as it hikes dividend 25%?

Restaurant Brands International's stock performance

QSR stock closed at C$ 66.50 on Tuesday, May 16, having lost almost 19 per cent in the last one year. But QSR scrip has spiked by over three per cent from its 52-week low of C$ 64.35 (May 12).

Its price-to-earnings (P/E) ratio, which depicts a stock’s overvalued (above 11) or undervalued status, was 19.7. QSR's return on equity (ROE), which indicates financial performance by dividing net profit by shareholder's equity, was 36.04 per cent.

On the hand, the restaurant chain's debt-to-equity (D/E) ratio is high at 6.36, which could indicate that it mainly uses debt financing.

QSR's Relative Strength Index (RSI) value was 33.56, just above the oversold mark-up of 30 on May 17, as per Refinitiv.

Bottomline

Biebs Brew, a creamy French vanilla cold brew, is said to be inspired by Mr Bieber’s love for coffee on ice and vanilla flavour. As the company claims that its first collab with Mr Bieber was a success, its second round with a new product could draw notable attention from customers too.

Tims restaurant in Canada will also have a limited edition Biebs Brew tumbler made of stainless steel and reusable straw, which could interest climate-conscious consumers.

With Biebs Brew launching in June, Restaurant Brands International could see higher revenues from the Tim Hortons division in the Canadian and the US market.

Please note, the above content constitutes a very preliminary observation based on the industry, and is of limited scope without any in-depth fundamental valuation or technical analysis. Any interest in stocks or sectors should be thoroughly evaluated taking into consideration the associated risks. 

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