Brinker International, the company behind fast-casual chains Chili's Grill & Bar and Maggiano's Little Italy, is trading 0.63% lower to $39.40, as of 3:25 p.m. ET. Brinker shares have gained 30% this year.
Brinker International's first quarter ended on September 25. It will report earnings on October 23.
TheStreet Ratings team rates Brinker International as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:
"We rate Brinker International (EAT) a BUY. This is driven by a number of strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its solid stock price performance, revenue growth, notable return on equity and growth in earnings per share. We feel these strengths outweigh the fact that the company has had subpar growth in net income."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The stock has risen over the past year as investors have generally rewarded the company for its earnings growth and other positive factors like the ones we have cited in this report. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
- Despite its growing revenue, the company underperformed as compared with the industry average of 4.6%. Since the same quarter one year prior, revenues slightly increased by 0.1%.
- The company's current return on equity greatly increased when compared to the same quarter last year. This is a signal of significant strength within the corporation. Compared to other companies in the Hotels, Restaurants & Leisure industry and the overall market, Brinker International's return on equity significantly exceeds that of both the industry average and the S&P 500.
- Brinker International's earnings per share improvement from the most recent quarter was slightly positive. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, Brinker International increased its bottom line by earning $2.21 a share vs. $1.89 a share in the prior year. This year, the market expects earnigns of $2.75 a share.
- The gross profit margin for Brinker International is rather low; currently at 20.45%, despite rising from the same period last year. Net profit margin of 6.35% trails the industry average.
- You can view the full analysis from the report here: EAT Ratings Report
--Written by Keris Alison Lahiff.