"Brinker has been our top pick in casual dining and we continue to remain positive on the stock following management meetings with stabilizing comps, margin initiatives on target, and FCF-driven share repurchase providing EPS cushion to above average 20-25% growth in F13 and at least low double digits thereafter," JPMorgan analysts wrote in a March 21 report.Shares of Brinker International hit a 52-week high on Wednesday of $29.31. The stock's 52-week low of $19.50 was set on Sept. 12. Brinker International's forward P/E is 13.22; the average for restaurant and bar companies is 19.4. For comparison, both Cracker Barrel (CBRL) and DineEquity (DIN) have lower forward P/Es of 12.15 and 11.98, respectively. Analysts were split on Brinker International with eight rating the stock a buy, another eight giving it a hold rating and four rating it sell. TheStreet Ratings gives Brinker International an A- grade with a buy rating and a $35.39 price target. The stock has risen 8% year to date.
Ross Stores "ROST benefited from both multiple expansion and earnings revisions - beating the high end of its initial 2011 plans by $0.31 - while TJX has kept Street estimates essentially unchanged - beating the high end of its initial 2011 plan by just $0.02 (upside has been all valuation)," JPMorgan analysts wrote in a March 20 report. "Coming into 2012, we see a slightly different setup, as ROST should continue its 'under-promise, over-deliver' mantra, while TJX may now be the company that has more upside left on the table in 2012." Shares of Ross Stores hit a 52-week high Wednesday of $57.53. The stock's 52-week low of $33.50 was set on Aug. 18. Ross Stores' forward P/E is 15.57; the average for apparel retailers is 17.16. For comparison, Aeropostale (ARO) has a lower forward P/E of 14.6; Express' (EXPR) forward P/E is 11.74. Fourteen of the 27 analysts who cover Ross Stores rated it hold; 13 analysts gave the stock a buy rating. TheStreet Ratings gives Ross Stores an A+ grade with a buy rating and a $73.96 price target. The stock has risen 20.49% year to date.
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