Restaurant Brands Intl Faces Uphill Battle Despite Tim Hortons Momentum
Restaurant Brands International Inc., a cornerstone of Bill Ackman’s Pershing Square Capital portfolio, unveiled a mixed picture in its second-quarter report.
As the third-largest holding in Ackman’s portfolio, Restaurant Brands accounts for a substantial 16.49% of the hedge fund’s investments.
While reporting second-quarter earnings on Aug. 8, Restaurant Brands surpassed revenue expectations, fueled largely by the performance of Canadian coffee icon Tim Hortons. However, the stock is grappling to find its footing.
Despite Tim Hortons’ commendable showing and the company’s global expansion efforts, investor sentiment remains muted. The stock has declined by 2.54% over the past year and 6.92% year-to-date.
CEO Josh Kobza, during the earnings call, accentuated that although the top-line results could have been more robust, Restaurant Brands International continues to outshine major rivals in key markets.
Nevertheless, this optimistic narrative has failed to uplift investor confidence or the stock price.
Upon a deeper technical assessment, the stock’s future appears murky, clouded by bearish signals.
Restaurant Brand’s current share price of $70 languishes beneath its five-, 20-, and 50-day moving averages, hinting at a palpably bearish sentiment with a hint of selling pressure.
The eight-day simple moving average sits at $70.52, the 20-day SMA at $70.89, and the 50-day SMA at $70.17, painting a bleak outlook.
Therefore, the prevailing trend remains somber, especially with the 200-day SMA at $73.32, adding another layer of pessimism.
Ackman may require more than Tim Hortons’ triumph to steer his third-largest holding towards brighter days. Amidst a downtrend and cautionary technical cues, investors might be in for a rough journey ahead.
Courtesy: Restaurant Brands International
