What Are Analysts Recommending for Brinker International?

On August 23, 2016, Brinker International’s (EAT) stock was trading at $54. The current price may have already factored in the estimates we’ve examined in this series. Let’s look now at EAT’s analyst recommendations and target prices for the stock for the next 12 months.

The rise in EPS estimates for next four quarters and better-than-expected fiscal 4Q16 results could have prompted analysts to raise their price target for 12-months to $53.2 from their earlier estimate of $52.5. The new estimate represents a decline of 1.4% from its current price.

Robert M Derrington of Telsey Advisory Group, who is more optimistic about the stock, expects the stock to reach $60 in next 12 months, which represents a return potential of 11.1%. On the low side, John S. Glass of Morgan Stanley expects the share price to decline by 13% to reach $47 in next 12-months.

The 12-month target prices for Brinker’s peers are as follows:

• Texas Roadhouse (TXRH): $45.6, with a potential return of 0.3%
• Buffalo Wild Wings (BWLD): $169.1, with a potential return of 4.1%
• Cheesecake Factory (CAKE): $53.9, with a potential return of 2.5%

According to a Bloomberg survey of 19 analysts, 20% gave Brinker “buy” recommendations, while 75% gave it “hold” recommendations, and 5% issued “sell” recommendations. Brinker’s share price moves in tandem with analyst recommendations. As analysts raise their 12-month target prices, Brinker’s share price should also rise, and vice versa.

Brinker’s stock is trading higher than its target price. This doesn’t mean an automatic “sell,” though. You should carefully analyze the various factors we’ve covered in this series before making any investment decisions.