Brinker International (EAT) Stock Forecast & Price Target

Brinker International Inc. has demonstrated strong financial performance, with Chili's achieving a significant same-store sales (SSS) growth of approximately 25% and traffic increases of 16% over the past year. The company also reported a notable expansion in restaurant margins, increasing by 260 basis points year-over-year to 17.8%, alongside a nearly 100% growth in adjusted earnings per share (EPS). Projections indicate continued improvement, with expectations of 30-40 basis points of margin expansion in FY26, supported by strong comp momentum and double-digit traffic growth.

Brinker International's stock outlook is negative primarily due to projected EBITDA being 10% lower than initial estimates for FY26, leading to a downside evaluation based on applying an EV/EBITDA multiple of 7.0-7.5x. The company's earnings guidance for FY26, while slightly above consensus, suggests only modest revenue growth, indicating difficulty in achieving significant same-store sales (comps) improvement. Additionally, various external factors, such as consumer spending trends and industry data, could negatively impact performance and limit margin expansion prospects.