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Brinker International (EAT)
NYSE:EAT
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Brinker International
(NYSE:EAT)
Select Model
Select Model
Rating:68Neutral
Price Target:
$167.00
▲(26.33% Upside)
Brinker International's strong earnings call sentiment and solid financial performance are the primary drivers of its stock score. However, high leverage and bearish technical indicators present risks. The valuation is moderate, and the absence of a dividend yield may deter some investors.
Positive Factors
Revenue Growth
Strong revenue growth indicates robust market demand and effective business strategies, positioning Brinker for sustained expansion in the competitive restaurant industry.
Debt Reduction
Significant debt reduction enhances financial flexibility and reduces risk, allowing Brinker to invest in growth opportunities and withstand economic fluctuations.
Operational Efficiency
Improved operating margins reflect enhanced efficiency and cost management, contributing to better profitability and competitive advantage in the restaurant sector.
Negative Factors
High Leverage
High leverage poses financial risk, potentially limiting Brinker's ability to navigate economic downturns and increasing vulnerability to interest rate hikes.
Maggiano's Performance
Underperformance at Maggiano's suggests brand-specific challenges that could hinder overall growth and require strategic adjustments to improve competitiveness.
Investment Needs
Large capital expenditures may strain financial resources and require careful management to ensure returns justify the investment, impacting cash flow and profitability.
Brinker International (EAT) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$5.88B
Dividend YieldN/A
Average Volume (3M)1.27M
Price to Earnings (P/E)15.9
Beta (1Y)0.60
Revenue Growth21.95%
EPS Growth146.44%
CountryUS
Employees68,852
SectorConsumer Cyclical
Sector Strength84
IndustryRestaurants
Share Statistics
EPS (TTM)2.49
Shares Outstanding44,498,110
10 Day Avg. Volume1,515,905
30 Day Avg. Volume1,271,468
Financial Highlights & Ratios
PEG Ratio0.14
Price to Book (P/B)21.24
Price to Sales (P/S)1.46
P/FCF Ratio19.05
Enterprise Value/Market Cap1.68
Enterprise Value/Revenue1.84
Enterprise Value/Gross Profit12.75
Enterprise Value/Ebitda13.74
Forecast
1Y Price Target
$179.10Price Target Upside35.49% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering10
Brinker International Business Overview & Revenue Model
Company DescriptionBrinker International, Inc., together with its subsidiaries, engages in the ownership, development, operation, and franchising of casual dining restaurants in the United States and internationally. The company operates in two segments, Chili's and Maggiano's. As of June 30, 2021, it owned, operated, or franchised 1,648 restaurants comprising 1,594 restaurants under the Chili's Grill & Bar name and 54 restaurants under the Maggiano's Little Italy brand name. The company was founded in 1975 and is headquartered in Dallas, Texas.
How the Company Makes MoneyBrinker International generates revenue primarily through the operation of its restaurant chains. The company's revenue model is based on the sale of food and beverages, with additional income coming from catering services, delivery, and takeout options. Key revenue streams include dine-in sales at its chain restaurants, which are complemented by a growing emphasis on off-premise dining options. Brinker has also engaged in strategic partnerships and promotions to enhance customer engagement and increase sales. Additionally, the company benefits from brand loyalty programs and marketing initiatives designed to attract repeat customers and drive new business. Economic factors such as consumer spending trends and competition in the casual dining sector also significantly influence Brinker’s earnings.
Brinker International Earnings Call Summary
Earnings Call Date:Aug 13, 2025
(Q4-2025)
| % Change Since: |
Next Earnings Date:Oct 29, 2025
Earnings Call Sentiment Positive
The earnings call reflects a strong positive sentiment due to Chili's impressive same-store sales growth, margin expansion, successful product launches, and significant debt reduction. Although Maggiano's performance lagged slightly, the overall financial health and strategic investments position the company well for continued growth.Q4-2025 Updates
Positive Updates
Chili's Same-Store Sales Growth
Chili's reported a 24% increase in same-store sales, significantly outperforming the casual dining industry by 1,890 basis points. This marks the 17th consecutive quarter of positive same-store sales growth.
Restaurant Operating Margin Expansion
Chili's restaurant operating margins expanded from 11.9% in fiscal '22 to 17.6% in fiscal '25, driven by simplification and operational improvements.
New Product Launch Success
The new frozen margarita program and ribs platform were well-received, with sales exceeding expectations. The frozen margarita sales doubled despite a higher price point.
Debt Reduction and Financial Strength
Brinker International paid down over $570 million in debt over the past three years, achieving a lease-adjusted leverage ratio of 1.7.
Strong Fiscal 2025 Financial Performance
Brinker reported total revenue growth of 21.9%, surpassing $5 billion in revenue for the first time, with a 420 basis point improvement in restaurant operating margins.
Marketing and Brand Recognition
Chili's marketing efforts were recognized as Ad Age's 2025 Brand of the Year, enhancing brand visibility and customer engagement.
Negative Updates
Maggiano's Performance Challenges
Maggiano's reported a slight decline in comp sales of 0.4%, indicating ongoing challenges in the brand's turnaround efforts.
Unfavorable Food and Beverage Costs
Fourth-quarter food and beverage costs were unfavorable by 60 basis points year-over-year due to an unfavorable menu mix and commodity inflation.
Continued Investment Needs
Brinker plans significant capital expenditures for fiscal '26, including $270 million to $290 million, to support reimagining and new unit growth.
Company Guidance
During Brinker International's Q4 fiscal 2025 earnings call, the company shared guidance for fiscal 2026, highlighting several key metrics and strategic initiatives. For fiscal 2026, Brinker anticipates annual revenues between $5.6 billion and $5.7 billion, with an adjusted diluted EPS ranging from $9.90 to $10.50. The company expects to maintain a pricing strategy within the 3% to 5% range, with a particular focus on barbell pricing to balance value and premium offerings. Moreover, Chili's is projected to achieve positive same-store sales each quarter, driven by various initiatives including menu simplification, improved food quality, and continued investment in labor and marketing. Capital expenditures for fiscal 2026 are projected to be between $270 million and $290 million, supporting remodeling efforts and long-term unit growth strategies. Additionally, Brinker plans to maintain G&A expenses at approximately 4% of total revenues. The company also highlighted its commitment to sustaining traffic growth, with an emphasis on operational enhancements and marketing effectiveness to sustain the momentum built over the past three years.Brinker International Financial Statement Overview
Summary
Brinker International demonstrates solid financial performance with strong revenue growth and improving profitability. However, the high leverage remains a concern, which could impact financial stability if market conditions change. The company shows good cash flow management, providing a buffer against potential financial challenges.Income Statement
Brinker International shows a strong revenue growth rate of 4.95% in the TTM, with improving profit margins. The gross profit margin increased slightly to 14.41%, and the net profit margin improved to 7.12%, indicating enhanced profitability. EBIT and EBITDA margins also show positive trends, reflecting operational efficiency. However, the restaurant industry remains competitive, and maintaining these growth rates could be challenging.75
Positive
Balance Sheet
The company has a high debt-to-equity ratio of 4.21, indicating significant leverage, which poses a risk. However, the return on equity is positive at 1.98%, showing that the company is generating returns for shareholders. The equity ratio is low, suggesting a reliance on debt financing, which could be a concern if interest rates rise or if the company faces cash flow issues.60
Neutral
Cash Flow
Brinker International's cash flow statement reflects a healthy free cash flow growth rate of 5.78% in the TTM. The operating cash flow to net income ratio is slightly above 1, indicating good cash generation relative to net income. The free cash flow to net income ratio of 0.61 suggests that a significant portion of net income is being converted into free cash flow, which is positive for financial flexibility.70
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 5.38B | 5.38B | 4.42B | 4.13B | 3.80B | 3.34B |
| Gross Profit | 775.80M | 775.80M | 627.30M | 500.10M | 499.20M | 503.30M |
| EBITDA | 719.70M | 716.00M | 400.70M | 314.20M | 325.70M | 351.60M |
| Net Income | 383.10M | 383.10M | 155.30M | 102.60M | 117.60M | 131.60M |
Balance Sheet | ||||||
| Total Assets | 2.68B | 2.68B | 2.59B | 2.49B | 2.48B | 2.27B |
| Cash, Cash Equivalents and Short-Term Investments | 18.90M | 18.90M | 64.60M | 15.10M | 13.50M | 23.90M |
| Total Debt | 1.69B | 1.69B | 2.00B | 2.16B | 2.27B | 2.04B |
| Total Liabilities | 2.31B | 2.31B | 2.55B | 2.63B | 2.75B | 2.58B |
| Stockholders Equity | 370.90M | 370.90M | 39.40M | -144.30M | -268.10M | -303.30M |
Cash Flow | ||||||
| Free Cash Flow | 413.70M | 413.70M | 223.00M | 71.40M | 101.90M | 275.70M |
| Operating Cash Flow | 679.00M | 679.00M | 421.90M | 256.30M | 252.20M | 369.70M |
| Investing Cash Flow | -263.40M | -263.40M | -192.20M | -174.20M | -234.20M | -90.90M |
| Financing Cash Flow | -461.30M | -461.30M | -180.20M | -80.50M | -28.40M | -298.80M |
Brinker International Technical Analysis
Negative
132.19
Price Trends
153.47
Negative
159.68
Negative
153.93
Negative
Market Momentum
-6.17
Positive
26.47
Positive
7.79
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For EAT, the sentiment is Negative. The current price of 132.19 is below the 20-day moving average (MA) of 148.23, below the 50-day MA of 153.47, and below the 200-day MA of 153.93, indicating a bearish trend. The MACD of -6.17 indicates Positive momentum. The RSI at 26.47 is Positive, neither overbought nor oversold. The STOCH value of 7.79 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for EAT.
Brinker International Risk Analysis
Brinker International disclosed 31 risk factors in its most recent earnings report. Brinker International reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Brinker International Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
74 Outperform | $10.80B | 24.79 | 30.19% | 1.63% | 14.59% | 18.98% | |
68 Neutral | $2.73B | 16.85 | 39.63% | 1.97% | 4.77% | 38.24% | |
68 Neutral | $5.88B | 15.91 | 186.74% | ― | 21.95% | 146.44% | |
68 Neutral | $1.46B | 11.20 | 29.28% | 3.47% | 0.09% | -23.74% | |
60 Neutral | $1.54B | 20.71 | -17.38% | 3.91% | -1.46% | 8.10% | |
57 Neutral | $3.94B | 199.01 | 4.03% | ― | 13.13% | -25.05% | |
61 Neutral | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% |
* Consumer Cyclical Sector Average
EAT
Brinker International
132.19
55.66
72.73%
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6.92
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-18.01%
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47.00
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TXRH
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162.53
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-6.61%
CAKE
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54.75
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SHAK
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92.40
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Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.