UPDATE: Bank of America Reiterates on Brinker International on Solid Margins, Modest Sales Increase
In a report published Thursday, Bank of America analyst Joseph T. Buckley reiterated an Underperform rating on Brinker International (NYSE: EAT), and raised the price target from $40.00 to $44.00.
In the report, Bank of America noted, “EAT reported 3Q (March) EPS of $0.84, in-line with our estimate and a penny above consensus. Chili's same store sales were up only modestly (+0.7% for company stores and +0.5% systemwide), but outperformed the Knapp-Track casual dining index by 250 bps. Most restaurant companies have highlighted negative winter weather impacts to sales and traffic to start the year and Brinker was no exception, citing a negative 100 bps impact to comps with a greater impact at Maggiano's and less at Chili's given the respective geographic footprints.
"While top-line results were a little light vs. consensus (but solid within the context of a challenging industry backdrop), EAT performed well on the cost side as restaurant level margins beat our expectations by 10 bps and G&A was also better than expected. A 90 bps y/y improvement in food costs provided a boost, driven by flat inflation and strong margins for Chili's new Fresh Mex menu items and flatbreads.”
Brinker International closed on Wednesday at $49.37.
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|Aug 2014||Raymond James||Upgrades||Market Perform||Outperform|
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