Restaurant Brands International Inc. QSR stock has declined 13.9% over the past six months compared with the Zacks Retail - Restaurants industry’s 3.9% fall. Over the same period, the broader Zacks Retail-Wholesale sector and the S&P 500 Composite have dropped 1.7% and 5.7%, respectively.

The recent dip in the QSR share price can be primarily attributed to rising cost pressures, softer customer traffic and overall market volatility. Investors have also been cautious amid ongoing macroeconomic uncertainty, including concerns related to tariffs and potential recession risks, which have further impacted sentiment.

The Restaurant Brands stock has underperformed some industry players in the past six months, including Darden Restaurants, Inc. DRI, Domino's Pizza, Inc. DPZ and Brinker International, Inc. EAT. During the said time frame, DRI, DPZ and EAT shares have rallied 25.2%, 6.2% and 75%, respectively.

QSR Stock’s Past 6 Months’ Price Performance

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From a technical perspective, Restaurant Brands’ stock is currently trading below its 50-day moving average, signaling a bearish trend.

Restaurant Brands Stock Trades Below 50-Day Moving Average

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Could the recent decline present a compelling entry point for QSR stock? Let us take a closer look at the company’s prospects to understand the potential ahead.

While recent challenges have weighed on performance, the company is poised to benefit from unit expansion, menu enhancements and ongoing digital advancements. Growing digital sales in international markets, supported by various service modes, may also help drive near-term momentum. The stock has gained 1.5% in the past three months against the industry’s 4.8% fall.

Analysts See Upside for QSR Despite Recent Decline

Despite the stock's recent decline, analysts' upward earnings estimate revisions reflect confidence in the company’s robust fundamentals. Analysts are becoming more optimistic about QSR’s earnings outlook.

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Over the past 60 days, the Zacks Consensus Estimate for Restaurant Brands’ 2025 EPS has increased from $3.68 to $3.71, implying a 11.1% year-over-year increase. Earnings for Darden, Domino’s, and Brinker are expected to grow 7%, 4.9%, and 102.4% respectively in fiscal 2025.

Restaurant Brands Shares Trade at a Discount

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QSR is currently trading at a discount compared with the industry, with a forward 12-month price-to-earnings (P/E) ratio of 16.28X. This is lower than the industry average of 25.01X, indicating that the stock may be undervalued. The lower valuation suggests an upside, making it an appealing opportunity for investors looking for value in the restaurant sector. Meanwhile, Darden, Domino’s, and Brinker are trading at a P/E ratio of 18.57x, 25.29x, and 16.05x respectively.

Let us explore the key factors that could support QSR stock and drive a rebound in the near term.

QSR Strengthens Global Footprint

Restaurant Brands is focusing on expanding its presence across international and North American markets through partnerships and franchise development. By collaborating with experienced operators and investing in modern, digital formats, the company aims to improve guest experience, support franchisee profitability and drive long-term brand growth.

In 2024, QSR opened 80 Firehouse Subs restaurants across the United States and Canada. This marked a significant increase in net restaurant growth from 3% in the previous year to more than 6%. The company attributes this progress to foundational steps taken in recent years, including building a dedicated development team, shifting away from legacy area developer arrangements and launching targeted development incentive programs.

The development pipeline for 2025 appears even stronger, supporting the company’s confidence in sustaining accelerated expansion across the Firehouse Subs brand in North America.

Restaurant Brands Drives Growth Through Menu Innovation

QSR remains focused on enhancing guest experience by strengthening its core offerings and introducing the latest, creative menu options. Through improved operations, balanced menu design and strategic product launches, the company aims to increase customer traffic, drive sales and reinforce brand identity across its portfolio.

In 2024, Restaurant Brands continued to execute its multi-year Reclaim the Flame plan with a focus on menu innovation, value offerings and better guest experience. The company launched the Addams Family Menu with Wednesday's Whopper, the Million Dollar Whopper campaign and the Melts platform. These efforts highlighted a strong demand for creative and affordable food.

QSR Focuses on Restaurant Remodels

Restaurant Brands is prioritizing restaurant upgrades through its Modern Image initiative. The remodel program is aimed at creating a more modern look, improving the guest experience, and supporting stronger sales and profit. In 2024, 370 remodels were completed, including about 60 at Carol’s locations, bringing the overall percentage of modernized restaurants to 51%.

QSR aims to achieve more than 85% Modern Image adoption at Burger King restaurants by 2028, strengthening its competitive position. In 2024, the company accelerated remodel efforts at Carol’s locations as part of the broader modernization strategy. Restaurant Brands has also started preparing to refranchise select locations in 2025, two years ahead of the original timeline, with plans to expand these efforts in 2026 and beyond.

Should You Buy, Sell or Hold Restaurant Brands Stock?

QSR continues to face pressure from elevated costs and softer customer demand. Investor sentiment has also remained subdued due to broader economic uncertainty.

However, analysts remain constructive on the company’s long-term prospects. Upward earnings estimate revisions indicate growing confidence in Restaurant Brands’ fundamentals. The stock is trading at a discount to the industry, suggesting an upside. The company currently carries a Zacks Rank #3 (Hold). Investors may prefer to stay on the sidelines until there is greater clarity. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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Domino's Pizza Inc (DPZ) : Free Stock Analysis Report

Darden Restaurants, Inc. (DRI) : Free Stock Analysis Report

Brinker International, Inc. (EAT) : Free Stock Analysis Report

Restaurant Brands International Inc. (QSR) : Free Stock Analysis Report

This article originally published on Zacks Investment Research (zacks.com).

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