Restaurant Brands International Inc. (QSR) stock intrinsic value fair value estimate & owner earnings analysis

Restaurant Brands International owns four fast-food brands: Tim Hortons (Canada), Burger King, Popeyes and Firehouse Subs. It is mostly a franchisor. About 33,000 restaurants generated roughly $46.8 billion of system sales in 2025, and RBI earns royalties, rent and franchise fees on that, plus it runs a limited number of its own restaurants. The model is durable but heavily indebted: about $13.4 billion of borrowings at a 4.4% average rate. What we count as earnings. We start from operating cash flow, strip out working-capital swings, and deduct stock compensation ($151 million in 2025) and the part of capital spending needed just to keep the business running. Owner earnings per share (about 457 million shares, including exchangeable partnership units) were $2.53 in 2018, $2.00 in the 2020 pandemic year, then $2.80, $2.71, $2.58, $2.61 and $3.05 for 2021 through 2025. We anchor on the middle of 2021-2025, $2.71, which describes the business after the Firehouse Subs purchase and excludes the pandemic. 2025 was up about 17% over 2024, but we do not extrapolate that: part of it is the full-year effect of the Carrols restaurant acquisition (May 2024) and part is working-capital timing. Cash flow in the first half of 2026 ($757 million against $567 million a year earlier) supports the level, but does not move it. Burger King China, acquired in February 2025 and being moved into a joint venture, is excluded as a discontinued operation. Base case: about $53 per share. Owner earnings grow 3% a year for ten years. That growth is credited only from the franchise model already running: net restaurant growth of 2.9% in 2025 and 3.4% in 2024, with a system-wide sales growth of 5.3% and 5.4% in those years. Positive comparable-sales growth (2.4% in 2025) is credited only in part, and margin gains, Carrols refranchising benefits and new-brand expansion are left out. Base year-1 growth is 3% versus 16.7% in 2025, a deliberate deceleration from a year flattered by acquisitions and timing. From 2030 we deduct about $0.30 per share a year for interest: $13.4 billion of debt matures in 2028-2030 ($3.4 billion, $2.5 billion and $7.4 billion) and today's 4.4% average is below current market rates. After year ten we assume the franchise royalty stream continues at its year-ten level with no further growth: long franchise agreements and brands that have operated for decades keep the cash flowing, but nothing specific supports growth beyond that. Bear case: about $33 per share. Owner earnings drift down 1% a year for ten years, reflecting weakness we can see: Burger King US net restaurants fell 0.8% in 2025 and Popeyes comparable sales dropped 3.2% (US down 2.9%). Refinancing the 2028-2030 maturities at about two percentage points higher costs roughly $0.59 per share a year from 2028. The company would still be worth a substantial amount in this case, because its franchise cash flows are largely contractual. Bull case: about $63 per share. Owner earnings grow 5% a year, matching the recent system-wide sales growth of 5.3-5.4% and the international unit growth already in the numbers (4.9% net restaurant growth in 2025, Firehouse Subs 7.7%). We keep the same refinancing cost as the base case and assume nothing beyond year ten. What would make this wrong. Tim Hortons and Burger King US together are the core earnings engine, so sustained sales declines there would hit hard. The debt leaves little room for error if rates stay high. Cash flow excludes the cash settlements on the company's currency hedges (about $76 million in 2025), which slightly understates recurring cash if those hedges continue. We could not reconcile the source of the 2025 non-cash foreign-exchange loss ($209 million) beyond the offsetting derivative gains, but the two largely net out. This is a first analysis, so there is no earlier version to compare against.