Restaurant Brands International Inc., a cornerstone in Bill Ackman’s Pershing Square Capital portfolio, unveiled its second-quarter performance with a mix of outcomes that have left investors pondering the future.
As the third-largest holding in Ackman’s fund, boasting an 8.5% stake in Restaurant Brands, the stock commands a significant 16.49% of the hedge fund’s total portfolio.
Reporting its Q2 earnings on August 8, the company exceeded revenue projections, propelled mainly by the success of Canadian coffee giant Tim Hortons. Despite this highlight, the stock struggles to gain favorable momentum.
Although Tim Hortons produced robust results and the company expanded globally, the stock market has not mirrored this enthusiasm. Restaurant Brands’ stock has endured a 2.54% decline over the past year and a 6.92% dip year-to-date.
While CEO Josh Kobza emphasized on the earnings call the company’s competitive edge in key markets, this positive narrative failed to alleviate investor pessimism or rejuvenate the stock price.
From a technical perspective, bearish indicators loom over the stock’s outlook.
Restaurant Brands’ current share price of $70 languishes below its five-, 20-, and 50-day exponential moving averages, painting a picture of a strongly bearish trajectory with a hint of selling pressure.
With 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 pointing to bearish signals, the overall trend remains feeble, particularly underscored by the 200-day SMA situated at $73.32 – another red flag investors should note.
Bill Ackman may have to look beyond the successes of Tim Hortons to steer his third-largest investment towards calmer waters. As the stock grapples with a downward trend and technical indicators sending caution signals, investors might be in for a turbulent journey ahead.