Brinker International (EAT) Downgraded by Zacks Investment Research

Brinker International (NYSE:EAT) was downgraded by Zacks Investment Research from a “hold” rating to a “sell” rating in a research note issued on Thursday.

According to Zacks, “Although shares of Brinker have outperformed the industry in a year’s time, earnings estimates for the current quarter and year have been stable over the past two months, limiting the stock's upside potential. Also, high costs associated with restaurant operations might hurt its profitability in the future. The company is plagued with intense competition characterizing the industry. Various sales building efforts are also causing the company to see dented margins as cost from these efforts are high. However, we are encouraged by Brinker’s aggressive expansion and sales-building initiatives along with increased investments in technology and continual focus on take-out businesses.”

Several other research analysts also recently weighed in on EAT. ValuEngine upgraded Brinker International from a “hold” rating to a “buy” rating in a report on Wednesday. Telsey Advisory Group reiterated a “market perform” rating and issued a $53.00 price target (up from $49.00) on shares of Brinker International in a report on Wednesday. Raymond James upgraded Brinker International from a “market perform” rating to an “outperform” rating in a report on Tuesday. Morgan Stanley boosted their price target on Brinker International from $38.00 to $40.00 and gave the company an “underweight” rating in a report on Wednesday, October 31st. Finally, Stifel Nicolaus upgraded Brinker International from a “hold” rating to a “buy” rating in a report on Monday, January 7th. Four research analysts have rated the stock with a sell rating, seven have assigned a hold rating and eight have given a buy rating to the stock. The stock has a consensus rating of “Hold” and an average target price of $46.31.

EAT stock traded down $0.30 on Thursday, reaching $49.07. The company had a trading volume of 1,173,138 shares, compared to its average volume of 1,148,455. Brinker International has a 1 year low of $32.03 and a 1 year high of $54.14. The firm has a market cap of $1.97 billion, a P/E ratio of 14.02, a PEG ratio of 1.53 and a beta of 0.25.

Brinker International (NYSE:EAT) last issued its quarterly earnings results on Tuesday, October 30th. The restaurant operator reported $0.47 earnings per share for the quarter, beating the Thomson Reuters’ consensus estimate of $0.45 by $0.02. The company had revenue of $753.80 million during the quarter, compared to the consensus estimate of $756.40 million. Brinker International had a negative return on equity of 23.89% and a net margin of 4.52%. Brinker International’s revenue was up 1.9% on a year-over-year basis. During the same period in the previous year, the firm posted $0.42 EPS. On average, analysts anticipate that Brinker International will post 3.76 EPS for the current year.

In other news, insider Wyman Roberts sold 35,478 shares of the company’s stock in a transaction on Tuesday, November 6th. The stock was sold at an average price of $47.55, for a total transaction of $1,686,978.90. Following the completion of the sale, the insider now directly owns 149,991 shares in the company, valued at approximately $7,132,072.05. The transaction was disclosed in a legal filing with the SEC, which is available at this link. Also, EVP Steve Provost sold 11,985 shares of the company’s stock in a transaction on Wednesday, November 28th. The stock was sold at an average price of $51.00, for a total value of $611,235.00. Following the sale, the executive vice president now owns 27,568 shares of the company’s stock, valued at $1,405,968. The disclosure for this sale can be found here. Over the last 90 days, insiders have sold 55,539 shares of company stock valued at $2,692,195. Insiders own 2.72% of the company’s stock.

Several hedge funds have recently added to or reduced their stakes in the company. Vanguard Group Inc increased its holdings in shares of Brinker International by 8.0% during the 3rd quarter. Vanguard Group Inc now owns 4,909,754 shares of the restaurant operator’s stock worth $229,433,000 after buying an additional 365,235 shares during the last quarter. Vanguard Group Inc. boosted its position in Brinker International by 8.0% during the 3rd quarter. Vanguard Group Inc. now owns 4,909,754 shares of the restaurant operator’s stock worth $229,433,000 after purchasing an additional 365,235 shares during the period. Dimensional Fund Advisors LP boosted its position in Brinker International by 0.4% during the 2nd quarter. Dimensional Fund Advisors LP now owns 1,310,802 shares of the restaurant operator’s stock worth $62,397,000 after purchasing an additional 5,541 shares during the period. Deutsche Bank AG boosted its position in Brinker International by 120.3% during the 3rd quarter. Deutsche Bank AG now owns 624,185 shares of the restaurant operator’s stock worth $29,163,000 after purchasing an additional 340,790 shares during the period. Finally, Millennium Management LLC boosted its position in Brinker International by 2,460.9% during the 2nd quarter. Millennium Management LLC now owns 576,652 shares of the restaurant operator’s stock worth $27,449,000 after purchasing an additional 601,077 shares during the period.

Brinker International Company Profile

Brinker International, Inc, together with its subsidiaries, owns, develops, operates, and franchises casual dining restaurants in the United States and internationally. As of June 27, 2018, it owned, operated, or franchised 1,686 restaurants comprising 997 company-owned restaurants and 689 franchised restaurants under the Chili's Grill & Bar and Maggiano's Little Italy brand names.

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