Restaurant Brands International Inc. (QSR), a key holding in Bill Ackman’s Pershing Square Capital portfolio, reported a mixed bag of results for its second quarter. Ackman’s Pershing Square Capital, which owns 8.5% of Restaurant Brands, holds the stock as its third-largest investment. The stock alone comprises 16.49% of the hedge fund’s portfolio.
Restaurant Brands recently announced its second-quarter earnings on August 8th. While the company’s revenue exceeded analysts’ expectations, primarily fueled by the Canadian coffee giant Tim Hortons, the stock is struggling to gain traction. Despite Tim Hortons’ strong performance and the company’s international growth, the stock has not reflected this positive outlook. Restaurant Brands stock is down 2.54% over the past year and 6.92% year-to-date.
CEO Josh Kobza highlighted on the earnings call that while the company’s top-line results could have been better, Restaurant Brands International has continued to outperform key competitors in some of its largest markets. However, this positive spin hasn’t been enough to lift investor sentiment or the stock price.
Technically, the stock’s outlook is clouded by bearish indicators. Restaurant Brand’s current share price of $70 is below its five-, 20-, and 50-day exponential moving averages, signaling a strongly bearish trend with slight selling pressure. The eight-day simple moving average at $70.52, the 20-day SMA at $70.89, and the 50-day SMA at $70.17, all suggest bearish signals. Therefore, the overall trend remains weak, especially with the 200-day SMA at $73.32, marking another bearish signal.
Ackman might need more than just Tim Hortons’ success to turn things around for his third-largest holding. With the stock trending lower and technical indicators flashing caution, investors may need to brace for a bumpy ride ahead.
