Why Brinker International (EAT) Outpaced the Stock Market Today

In the latest trading session, Brinker International (EAT) closed at $146.96, marking a +2.48% move from the previous day. The stock outperformed the S&P 500, which registered a daily gain of 1.15%. On the other hand, the Dow registered a gain of 1.38%, and the technology-centric Nasdaq increased by 1.38%.

Heading into today, shares of the operator of restaurant chains Chili's Grill & Bar and Maggiano's Little Italy had lost 2.13% over the past month, outpacing the Retail-Wholesale sector's loss of 6.15% and the S&P 500's loss of 5.69%.

Analysts and investors alike will be keeping a close eye on the performance of Brinker International in its upcoming earnings disclosure. The company is predicted to post an EPS of $2.86, indicating a 7.52% growth compared to the equivalent quarter last year. Meanwhile, our latest consensus estimate is calling for revenue of $1.48 billion, up 3.91% from the prior-year quarter.

For the entire fiscal year, the Zacks Consensus Estimates are projecting earnings of $10.68 per share and a revenue of $5.81 billion, representing changes of +20% and +7.93%, respectively, from the prior year.

Any recent changes to analyst estimates for Brinker International should also be noted by investors. These recent revisions tend to reflect the evolving nature of short-term business trends. As such, positive estimate revisions reflect analyst optimism about the business and profitability.

Based on our research, we believe these estimate revisions are directly related to near-term stock moves. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

The Zacks Rank system, which varies between #1 (Strong Buy) and #5 (Strong Sell), carries an impressive track record of exceeding expectations, confirmed by external audits, with stocks at #1 delivering an average annual return of +25% since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has witnessed a 0.19% increase. Right now, Brinker International possesses a Zacks Rank of #1 (Strong Buy).

Valuation is also important, so investors should note that Brinker International has a Forward P/E ratio of 13.43 right now. For comparison, its industry has an average Forward P/E of 19.1, which means Brinker International is trading at a discount to the group.

It is also worth noting that EAT currently has a PEG ratio of 1.01. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. The average PEG ratio for the Retail - Restaurants industry stood at 1.97 at the close of the market yesterday.

The Retail - Restaurants industry is part of the Retail-Wholesale sector. This industry currently has a Zacks Industry Rank of 171, which puts it in the bottom 31% of all 250+ industries.

The strength of our individual industry groups is measured by the Zacks Industry Rank, which is calculated based on the average Zacks Rank of the individual stocks within these groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Keep in mind to rely on Zacks.com to watch all these stock-impacting metrics, and more, in the succeeding trading sessions.

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This article originally published on Zacks Investment Research (zacks.com).

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