NEW YORK (TheStreet) -- Shares of Burger King Worldwide (BKW) are surging, up 3.84% to $35.95 in afternoon trading Thursday, following the fast food restaurant chain's rating upgrade to "outperform" from "sector perform" by analysts at RBC before the opening bell this morning.
Analysts at the firm raised its price target to $38 from $30, saying they believe the company's pending merger with Canadian coffee chain Tim Hortons (THI) will prove to be a windfall for the two companies.
Combined, Burger King Worldwide and Tim Hortons will have 18,000 stores and $23 billion in annual sales, in a move that relocates Burger King's headquarters to Canada to save the company millions of dollars in taxes every year.
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Separately, TheStreet Ratings team rates BURGER KING WORLDWIDE INC as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
"We rate BURGER KING WORLDWIDE INC (BKW) a HOLD. The primary factors that have impacted our rating are mixed, some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its revenue growth, good cash flow from operations and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and generally higher debt management risk."