Brinker International (EAT) Stock Forecast & Price Target

Brinker International's stock outlook is supported by several fundamental improvements, particularly in its key segment, Chili's, which achieved significant year-over-year sales growth with nearly a 25% increase in same-store sales (SSS) and a notable 16% rise in traffic. The company also demonstrated operational strength, with restaurant margins expanding by 260 basis points to 17.8%, coupled with a significant 100% increase in adjusted earnings per share, showcasing effective cost management and a de-leveraged balance sheet. Additionally, the company projects ongoing margin expansion in FY26, driven by improved sales leverage and moderated investment, indicating sustained growth potential for investors.

Brinker International's stock outlook appears negative due to concerns over a low restaurant-level profit flow-through of approximately 14% in the latest quarter, coupled with expectations that relevant labor market metrics (RLMs) may soften in the latter half of the fiscal year. The company’s EBITDA is projected to be 10% below estimates for FY26, leading to a derived downside of $115 when applying an EV/EBITDA multiple of 7.0-7.5x. Furthermore, while initial EPS guidance for FY26 is slightly above consensus, expectations of modest same-store sales growth (MSD% comps) and the significant influence of consumer spending patterns could hinder overall financial performance.