Q: Between Restaurant Brands QSR and Chipotle CMG , which stock do you think will have higher share price appreciation over the next two years and why ?
Thanks, Tim.
Thanks, Tim.
5i Research Answer:
It’s a tough call, as both are high-quality restaurant businesses pursuing different approaches to growth. While QSR operates as a franchisor which is more capital-light, CMG owns their own store which requires more investment over the years. That said, the market highly values CMG’s business model, putting a premium multiple of more than 50x Forward P/E. We think QSR should do better 5 years from now given the discount valuation and also the relatively attractive growth prospects.