Brinker International, Inc. (NYSE:EAT)‘s stock had its “hold” rating reaffirmed by research analysts at Canaccord Genuity in a research note issued to investors on Wednesday.
The analysts wrote, “We thought that management was fairly optimistic on the call, indicating a sales/traffic improvement in Q2 so far, which reinforces our belief that Q1 was likely the low point in terms of financial performance for the fiscal year. While we see Chili’s movement towards a more concentrated menu (ribs, burgers & fajitas) and investments in to-go infrastructure as positives, we continue to expect traffic losses given competitive threats. As such, we remain on the sidelines with a HOLD rating. With respect to valuation, shares of EAT are trading at 7.0x NTM EBITDA (FactSet), more than one standard deviation below its L-T historical average. We are lowering our PT to $36 (from $40), which reflects ~7.5x our FY19 EBITDA estimate of $429.8 million.””
Several other equities research analysts have also weighed in on EAT. Barclays PLC reissued an “equal weight” rating and set a $47.00 target price on shares of Brinker International in a research report on Tuesday, July 4th. Telsey Advisory Group cut their target price on Brinker International from $49.00 to $40.00 and set a “market perform” rating on the stock in a research report on Monday, July 17th. Zacks Investment Research lowered Brinker International from a “hold” rating to a “strong sell” rating in a research report on Friday, July 21st. Raymond James Financial, Inc. restated a “market perform” rating on shares of Brinker International in a research note on Monday, July 24th. Finally, Sanford C. Bernstein restated a “market perform” rating and set a $50.00 price target on shares of Brinker International in a research note on Tuesday, July 25th. Two analysts have rated the stock with a sell rating, thirteen have issued a hold rating and three have issued a buy rating to the company’s stock. Brinker International presently has an average rating of “Hold” and a consensus target price of $40.50.
Brinker International (NYSE:EAT) last issued its earnings results on Wednesday, November 1st. The restaurant operator reported $0.42 earnings per share for the quarter, missing the consensus estimate of $0.43 by ($0.01). Brinker International had a negative return on equity of 30.36% and a net margin of 4.39%. The business had revenue of $739.40 million for the quarter, compared to analyst estimates of $749.05 million. During the same period last year, the business posted $0.49 EPS. Brinker International’s revenue was down 2.5% on a year-over-year basis.
Brinker International declared that its Board of Directors has authorized a stock repurchase plan on Thursday, August 10th that authorizes the company to repurchase $250.00 million in outstanding shares. This repurchase authorization authorizes the restaurant operator to purchase up to 14.6% of its stock through open market purchases. Stock repurchase plans are often a sign that the company’s management believes its stock is undervalued.
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In related news, Director Michael A. George bought 16,450 shares of the stock in a transaction on Wednesday, September 6th. The shares were bought at an average cost of $30.31 per share, for a total transaction of $498,599.50. Following the purchase, the director now owns 49,952 shares of the company’s stock, valued at approximately $1,514,045.12. The acquisition was disclosed in a legal filing with the SEC, which is accessible through the SEC website. Company insiders own 1.91% of the company’s stock.
Hedge funds have recently made changes to their positions in the business. Bruderman Asset Management LLC purchased a new position in shares of Brinker International in the 2nd quarter valued at approximately $123,000. LS Investment Advisors LLC grew its stake in shares of Brinker International by 14.2% in the 2nd quarter. LS Investment Advisors LLC now owns 4,689 shares of the restaurant operator’s stock valued at $179,000 after purchasing an additional 582 shares during the last quarter. ING Groep NV purchased a new position in shares of Brinker International in the 2nd quarter valued at approximately $227,000. Profund Advisors LLC grew its stake in shares of Brinker International by 0.8% in the 2nd quarter. Profund Advisors LLC now owns 6,849 shares of the restaurant operator’s stock valued at $261,000 after purchasing an additional 57 shares during the last quarter. Finally, Nomura Holdings Inc. purchased a new position in shares of Brinker International in the 2nd quarter valued at approximately $262,000.
About Brinker International
Brinker International, Inc is engaged in the ownership, operation, development, and franchising of the Chili’s Grill & Bar (Chili’s) and Maggiano’s Little Italy (Maggiano’s) restaurant brands. The Company’s Chili’s operates Bar & Grill category of casual dining. Chili’s menu features authentic Fresh Mex and Fresh Tex cuisine, including signature items, such as Baby Back Ribs smoked in-house, Hand-Crafted Burgers served with house-made garlic dill pickles, Mix and Match Fajitas, Tableside Guacamole and house-made Chips and Salsa.
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