The Mixed Bag of Results
Restaurant Brands International Inc. (NYSE: QSR), a significant piece of Bill Ackman’s Pershing Square Capital portfolio, faced a blend of outcomes in its second-quarter performance.
As per the holdings data, Pershing Square Capital owns 8.5% of Restaurant Brands, with the stock representing a hefty 16.49% of the hedge fund’s portfolio.
In the latest report released on August 8, Restaurant Brands showcased revenue that exceeded analysts’ expectations, largely propelled by the success of the renowned Canadian coffee chain, Tim Hortons.
Struggling Stock Performance
Despite the commendable performance of Tim Hortons and the company’s ventures into international markets, the stock has not been able to mirror this positivity. Over the past year, Restaurant Brands’ stock has seen a decline of 2.54%, with a year-to-date decrease of 6.92%.
Josh Kobza, the CEO of Restaurant Brands International, noted during the earnings call that although the top-line results could have been better, the company has managed to outshine its key rivals in major markets.
Yet, this optimistic tone has failed to uplift investor sentiment or influence the stock price positively.
Bearish Outlook
From a technical standpoint, the future of the stock appears clouded with bearish indicators.
The current share price of $70 for Restaurant Brands lies below its five-, 20-, and 50-day exponential moving averages, indicating a robustly 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 point towards bearish signals.
With the 200-day SMA standing at $73.32, another bearish signal looms over the stock, signifying a weakening trend.
Ackman’s reliance solely on Tim Hortons’ achievements may not suffice to steer his third-largest holding in the right direction. As the stock continues its descent and technical indicators raise red flags, investors might need to prepare for a turbulent journey ahead.
