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Restaurant Brands International recently reported a notable increase in sales and revenue for Q1 2025 but faced a decline in net income and earnings per share. Despite this mixed financial performance, the company confirmed a quarterly dividend. Over the past month, the stock surged 12%. This significant price movement aligns with broader market trends witnessing upward momentum, although it counterbalances concerns over economic fluctuations related to tariffs between the U.S. and China. The company's updates were likely influential in reinforcing shareholder confidence amidst mixed performances of market indices and ongoing tariff discussions.

We've identified 2 weaknesses with Restaurant Brands International (at least 1 which is a bit concerning) and understanding the impact should be part of your investment process.

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While Restaurant Brands International's recent quarterly performance highlighted an increase in sales and revenue, its decline in net income and earnings per share could influence future revenue and earnings forecasts. The ongoing tariff discussions between the U.S. and China may pose further risks to profitability across its international operations. These geopolitical factors, combined with strategic moves like the acquisition of Carrols Restaurant Group and Popeyes China, could either mitigate or exacerbate revenue and margin fluctuations.

Over the past five years, the company's shares delivered a total return of 57.26%, reflecting a significant appreciation, including dividends, during this period. In comparison to the last year's performance, the company underperformed both the U.S. Hospitality industry, which returned 8.1%, and the broader U.S. market, which returned 8.2%. This longer-term view highlights the company's resilience and the value accumulated over time, despite last year's headwinds.

Furthermore, the recent 12% surge in the company's share price narrows the gap significantly compared to the consensus analyst price target of US$75.95. Currently trading at US$67.77, the stock still holds potential upside per the analyst estimates, highlighting investor optimism likely driven by expectations of enhanced digital capabilities and global expansion initiatives.

Gain insights into Restaurant Brands International's outlook and expected performance with our report on the company's earnings estimates.

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.