Brinker gains after Jefferies says the Chili's momentum will sustain
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Jefferies upgraded Brinker International (EAT) to a Buy rating after having it set at Hold. The firm sees a clear transition for the restaurant from turnaround status into a durable, compounding story.
"We think the value creation opportunity is underappreciated, as this higher-volume/margin platform creates a flywheel of reinvestment to drive years of consistent growth & share gain," highlighted analyst Alexander Slagle. "We look to DRI's decade-long transformation as a framework, where EAT now approaches the scale where DRI began one of the industry's most productive periods of value creation," he added.
Notably, the boom for the Chili's brand has set off a flywheel of positive traffic, market share gains, sustained cash flow generation, and reinvestment that is seen continuing. Slagle noted Chili's still has 40% of its menu to refresh.
Jefferies assigned a price target of $255 to Brinker (EAT) based on a multiple of 11X the 2027 EBITDA estimate.
Shares of Brinker International (EAT) broke 3.4% higher in premarket trading to $209.21 vs. the 52-week range of $100.30 to $254.99.
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