Brinker International: Strong Operating Momentum, Improving Margins, and Upside to Fiscal 2026 EPS Drive Buy Rating

UBS analyst Dennis Geiger has maintained their bullish stance on EAT stock, giving a Buy rating today.

Dennis Geiger has given his Buy rating due to a combination of factors tied to Brinker International’s operating momentum and earnings outlook. He expects strong fiscal second-quarter results, with same-store sales at Chili’s likely exceeding market expectations and driving an earnings-per-share outcome above current consensus. Management’s strategic initiatives—such as menu enhancements, compelling value propositions, and effective marketing—are seen sustaining positive traffic trends even against tough comparisons. Geiger also anticipates that these drivers, along with potential stimulus-related benefits, support the likelihood of higher fiscal 2026 EPS guidance than previously communicated, reinforcing a favorable growth narrative for the stock.
In addition to sales strength, Geiger acknowledges near-term margin pressure from higher commodity, labor, and marketing costs but expects profitability to improve in the second half of fiscal 2026 as sales growth, pricing, and cost controls take hold. The anticipated easing of Brazil-related tariffs should further reduce beef costs and bolster margins over the coming year. He highlights accelerating unit growth, a solid balance sheet with modest leverage, and share repurchase activity as additional catalysts that can unlock further shareholder value. Based on these factors, and valuing the stock at roughly 8.5x his forward EBITDA estimate, he sees meaningful upside from current levels, supporting his Buy recommendation.

In another report released today, TD Cowen also initiated coverage with a Buy rating on the stock with a $192.00 price target.