BMO Capital raises Brinker International PT to $170, maintains Market Perform rating.

BMO Capital raises Brinker International PT to $170, maintains Market Perform rating.

Title: BMO Capital Raises Brinker International PT to $170, Maintains Market Perform Rating

BMO Capital Markets has updated its price target for Brinker International (NYSE: EAT) to $170, while maintaining its Market Perform rating. The move comes following the company's strong second-quarter fiscal 2025 results, which exceeded market expectations [1].

Brinker International reported revenue of $1.46 billion, a 21% year-over-year increase, and non-GAAP earnings per share (EPS) of $2.49, surpassing analysts' estimates by 0.8% [1]. The company expects full-year 2025 revenue to be around $5.65 billion, close to analysts' projections [1].

The positive results were driven by robust same-store sales growth, particularly at Chili’s, and significant improvements in restaurant operating margins. Management attributed these gains to ongoing menu simplification, targeted operational investments, and kitchen equipment upgrades, which enhanced food quality and guest experience [1].

BMO Capital's price target reflects the company's ability to execute its turnaround strategy, but also acknowledges potential valuation hurdles. The analyst firm noted that while Brinker's recent performance has been impressive, there are concerns about the sustainability of its current growth rates, particularly as the company faces tougher year-over-year comparisons in the coming quarters [2].

Looking ahead, Brinker plans to continue investing in menu innovation, operational efficiency, and targeted restaurant remodels to sustain above-industry traffic and margin expansion. The company's new VP of Restaurant Development is charged with executing these plans and optimizing the restaurant footprint [1].

Despite the positive outlook, BMO Capital maintains a Market Perform rating, indicating a cautious view on the stock's potential. The firm's price target of $170 reflects a balance between the company's recent performance and the challenges it may face in the coming quarters.

Investors should closely monitor Brinker's upcoming earnings reports and the execution of its strategic initiatives to assess the validity of BMO Capital's price target and rating.

References
[1] https://finance.yahoo.com/news/brinker-international-nyse-eat-fiscal-053048294.html
[2] https://www.investing.com/news/swot-analysis/brinker-internationals-swot-analysis-stock-turnaround-faces-valuation-hurdles-93CH-4188408