Story updated at 10 a.m. to reflect market activity.
Brinker International gained 0.2% to $49.49 in morning trading.
The firm reiterated its "overweight" rating for the stock. Barclays analysts cited negative comps as dining fundamentals remain unchanged as cause for the price target cut.
Separately, TheStreet Ratings team rates BRINKER INTL INC as a Buy with a ratings score of B+. TheStreet Ratings Team has this to say about their recommendation:
"We rate BRINKER INTL INC (EAT) a BUY. This is driven by several positive factors, 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 revenue growth, notable return on equity, solid stock price performance, impressive record of earnings per share growth and increase in net income. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- EAT's revenue growth has slightly outpaced the industry average of 3.8%. Since the same quarter one year prior, revenues slightly increased by 2.1%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 33.78% over the past year, a rise that has exceeded that of the S&P 500 Index. Regarding the stock's future course, although almost any stock can fall in a broad market decline, EAT should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
- BRINKER INTL INC has improved earnings per share by 16.0% in the most recent quarter compared to the same quarter a year ago. 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 INTL INC increased its bottom line by earning $2.21 versus $1.89 in the prior year. This year, the market expects an improvement in earnings ($2.72 versus $2.21).
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. 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 INTL INC's return on equity significantly exceeds that of both the industry average and the S&P 500.
- The net income growth from the same quarter one year ago has exceeded that of the Hotels, Restaurants & Leisure industry average, but is less than that of the S&P 500. The net income increased by 6.9% when compared to the same quarter one year prior, going from $37.18 million to $39.74 million.
- You can view the full analysis from the report here: EAT Ratings Report