Burger King Downgraded on Discounting and Poor Franchisee Relations

Credit Suisse today downgraded Burger King due parttly to "raised expectations" of the $1 double cheeseburger offer which might not be sustained, as well as recent tensions with franchisees. Burger King was lowered from outperform to neutral, with a $2 stock price target decrease, to  $21.

At the same time, McDonalds was upgraded, to outperform, and a $2 increased stock price target of $71. 


"Follow The Money"

That old saying, "Follow The Money" is alive and well...and should act as an object lesson to franchisors (both publicly traded and private). A QSR analyst lowered the price objective on BK by $2 due, in part, to franchisee discord. From a valuation standpoint, that's around a $250 MILLION hit to perceived shareholder future value (based on 127.8 million shares outstanding)!