Shares of Brinker International (EAT +2.87%), the parent of Chili's, were moving higher today after the casual dining chain got an upgrade from a Wall Street analyst.
As of 11:29 a.m. ET, the stock was up 4% after gaining as much as 6.5% earlier in the session.
Image source: Getty Images.
Brinker continues to impress
Northcoast upgraded the restaurant stock from neutral to buy, citing strong growth at Chili's. Analyst Jim Sanderson gave the stock a price target of $275, implying upside of 37% over the next year.
He also said Chili's is well-positioned for long-term growth under new management, and that menu improvements and better marketing put the company in a position to exceed in-store margins of 20%.
Chili's has been one of the top-performing restaurant stocks, both on the market and in its results, as it's taken market share thanks to savvy ad campaigns touting better value than fast-food options like McDonald's, and a refreshed menu.
Same-store sales growth has cooled off from earlier in its surge when it was up above 20%, but it finished fiscal 2026, which ended in July, with 8.1% comparable sales growth across the company and 9.2% at Chili's. Brinker also owns Maggiano's, which has struggled lately with negative comparable sales.
NYSE: EAT
Key Data Points
What's next for Brinker
Brinker's days of hypergrowth may be coming to an end, but Sanderson makes a good point about the company's ability to sustain superior margins. Through fiscal 2029, the company is targeting 4%-6% annual revenue growth, including 2%-3% unit growth with 30 new restaurants annually. It also called for double-digit annual adjusted EPS growth, boosted by repurchasing 3%-5% of its shares annually.
If Brinker can execute on those goals, the stock should continue to move higher.
