Brinker International (EAT) has received a new Buy rating, initiated by TD Cowen analyst, Andrew Charles.
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Andrew Charles has given his Buy rating due to a combination of factors that point to Brinker International’s improving fundamentals and attractive valuation. He expects Chili’s, which generates the majority of the company’s sales, to deliver same-store sales growth ahead of market expectations through 2028, supported by better customer perceptions of value and food quality, particularly among younger guests. These gains are underpinned by ongoing initiatives in data-driven marketing, menu refinement, restaurant remodels, and operational execution, all of which he believes are still in the middle stages and can continue to drive performance. In his view, the casual dining segment is also relatively insulated from the most pressured consumer cohorts, which further supports the sales outlook.
Charles also anticipates that stronger sales will enhance unit economics enough to justify a gradual acceleration in net restaurant growth toward roughly 2% annually over time, a level he argues Brinker has “earned” following its post-2022 turnaround under current leadership. He models restaurant expansion and margin improvement that exceed consensus, helped by operating leverage and easing commodity cost headwinds beginning in fiscal 2027. This combination is expected to support mid-teens adjusted EPS growth and yields EPS estimates for 2026–2028 that are modestly above the Street. Taken together, the projected outperformance in comps, disciplined but rising unit growth, and margin recovery support his view that the stock’s valuation discount to peers should narrow, justifying a Buy recommendation.
Charles covers the Consumer Cyclical sector, focusing on stocks such as Yum! Brands, Darden Restaurants, and Shake Shack. According to TipRanks, Charles has an average return of 8.0% and a 51.71% success rate on recommended stocks.
In another report released today, Morgan Stanley also upgraded the stock to a Buy with a $200.00 price target.