What Happened?
Shares of casual restaurant chain Brinker International (NYSE: EAT) jumped 6.8% in the afternoon session after an analyst at TD Cowen raised their price target on the stock and the company's CEO expressed confidence in its performance, citing sustained sales growth at its Chili's brand.
CEO Kevin Hochman stated the company is 'firing on all cylinders' after Chili's achieved 20 consecutive quarters of comparable sales growth. This positive commentary was echoed by an analyst at TD Cowen, who maintained a 'Buy' rating and increased the price target from $170 to $192. The optimism was shared by other analysts, who point to continued momentum from menu innovation and value offerings, such as the '3 For Me' deal, as key growth drivers. Wall Street forecasts 21% earnings growth for Brinker in 2026, with some noting that the stock's growth potential appears underappreciated by the market, as it trades at a lower multiple than its restaurant peers.
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What Is The Market Telling Us
Brinker International’s shares are very volatile and have had 20 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was about 1 month ago when the stock gained 16.1% on the news that it reported strong third-quarter fiscal 2026 results that beat earnings expectations and raised its full-year profit forecast.
The company posted adjusted earnings of $2.90 per share, surpassing analysts' forecasts of $2.87, while revenue came in at $1.47 billion, matching expectations. A key driver was the performance of its Chili's brand, which recorded its 20th straight quarter of same-store sales growth, with an increase of 4.0%. Overall, comparable restaurant sales for the company rose by 3.3%. Buoyed by the strong performance, Brinker raised its adjusted earnings guidance for fiscal 2026 to a range of $10.60 to $10.85 per share. The company also noted it used cash from operations to pay down debt and repurchase $108 million of its stock during the quarter.
Brinker International is up 3.5% since the beginning of the year, but at $156.82 per share, it is still trading 14.8% below its 52-week high of $184.02 from June 2025. Investors who bought $1,000 worth of Brinker International’s shares 5 years ago would now be looking at an investment worth $2,573.
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