UPDATE: KeyBanc Capital Markets Initiates Coverage of Brinker International with Buy Rating, $40 PT

In a report published Friday, KeyBanc Capital Markets initiated coverage of Brinker International EAT with a Buy rating and a $40.00 price target, related to recent performance of Chili's Grill & Bar. KeyBanc noted, “Chili's is well-positioned to grow EPS in the 17-20% range for the next few years fueled by at least 3% SRS gains, 1-2% unit growth, 150 bps of margin expansion during the next two years, and 5-7% of annual share count reduction. The Street's 15% EPS growth projection for the next few years will likely prove conservative as SRS gains, coupled with cost improvements, deliver better than expected profit growth, which in turn provides greater capacity for share repurchases.” Brinker International closed yesterday at $32.17.