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Restaurant Brands (QSR) to Strengthen Popeyes Presence in Mexico

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Restaurant Brands International Inc.’s (QSR - Free Report) Popeyes recently announced an agreement with JK Capital to boost its portfolio in the Mexico region. Following the news, shares of the company moved up 1.5% during trading hours on Mar 19.

With this initiative, the company intends to bring in hundreds of new Popeyes’ restaurants in Mexico to develop businesses as well as to translate the successful expansion of the brand in the region.

In this regard, Manuel Rodrigues, General Manager of Popeyes, Latin America & Caribbean, stated, "Our team has been working diligently to bring these additional Popeyes locations to Mexico, and I am confident that our brand is positioned for success in the country for many years to come."

Focus on Expansion

Restaurant Brands believes that there is a huge opportunity to grow its brands around the world by expanding presence in existing markets as well as entering new markets.

The company’s Popeyes brand has significantly expanded its global reach by entering into several new markets. Notably, the brand had witnessed successful international expansions in Spain, Switzerland, China, Brazil and the Philippines. Also, the brand achieved net restaurant growth of 132 stores in the United States in 2020.

Going forward, the company intends to evaluate opportunities to ramp up international development by establishing master franchisees with exclusive development rights and joint ventures with new and existing franchisees. Also, it intends to focus on its pipeline to deliver solid net restaurant growth in 2021.

Price Performance

Coming to price performance, shares of Restaurant Brands have increased 6.1% so far this year compared with the industry's 4.6% growth. Notably, the company has been benefiting from the expansion of delivery via digital platform amid the pandemic. In 2020, delivery sales at Burger King and Popeyes have unfolded 2 times and 3 times growth, respectively compared with 2019 levels. Moreover, focus on off-premise capabilities through reimaging, drive-thru enhancements, loyalty program and applications bode well. Earnings estimates for 2022 have moved up in the past 30 days. This reflects on analysts’ optimism regarding the stock’s growth potential.

Zacks Rank & Key Picks

Restaurant Brands currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Some better-ranked stocks in the Zacks Retail-Wholesale sector include L Brands, Inc. , Abercrombie & Fitch Co. (ANF - Free Report) and Jack in the Box Inc. (JACK - Free Report) . L Brands and Abercrombie sport a Zacks Rank #1, while Jack in the Box carries a Zacks Rank #2 (Buy).

L Brands and Abercrombie’s earnings for 2022 are expected to rise 22% and 286.3%, respectively.

Jack in the Box has three-five-year earnings per share growth rate of 17%.

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