RBC Likes Tim Horton's Same-Store Sales Growth

| About: Restaurant Brands (QSR)
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The market didn’t seem too excited about Tim Hortons Inc.’s (THI) third quarter profits since they were essentially in line with analysts’ estimates. But investors sure have got a jolt from the stock so far this year; it has risen nearly 30%.

And there is more upside to come if you ask RBC Capital Markets analyst Irene Nattel, who hiked her price target for the “outperform”-rated coffee and donut chain by two bucks to C$43 per share following the results.

Meanwhile, Tim Hortons’ C$200-million share buyback, which takes effect Oct. 31, was expected, she told clients in a note.

Some challenges the company could encounter include the negative impact high energy prices could have on consumer income, declining tourism in Canada, and failure to make headway in the U.S. market. However, same-store sales growth in the U.S. came in at 4.5%, above the company’s forecast of 4%. This was below its long-term goal of 6% to 7%.

Ms. Nattel also noted that same-store sales growth excluding price increases were more impressive, beating out rival McDonalds (NYSE:MCD).