Brinker International (EAT) Stock Forecast & Price Target

Brinker International Inc. has demonstrated impressive financial performance, highlighted by a 25% growth in same-store sales for Chili's, which includes a notable 16% increase in traffic, reflecting strong customer engagement. Additionally, the company's restaurant margins expanded by 260 basis points year-over-year to 17.8%, indicating operational efficiency, while adjusted earnings per share grew by more than 100%, showcasing significant profitability improvement. The outlook remains positive with expectations of further restaurant margin expansion of 30-40 basis points in FY26, supported by ongoing sales leverage and a well-managed cost structure.

Brinker International's stock outlook appears negative due to its projected EBITDA being 10% below estimates for FY26, which is concerning as it highlights potential revenue and profitability challenges. The introduction of FY26 EPS guidance at $9.90-10.50, slightly above consensus, does not mitigate worries about the underlying growth, particularly with same-store sales (comps) expected to be in the mid-single digits. Key factors contributing to this outlook include uncertainties in consumer spending trends, reliance on catalysts for growth, and the competitive pressures within the casual dining sector.