UPDATE: BMO Capital Markets Initiates Coverage On Brinker International

BMO Capital Markets initiated coverage on Brinker International, Inc. EAT in a report issued Thursday with a Market Perform rating and $49 price target.

Analyst Andrew Strelzik believed that "Brinker is a relatively safe investment owing to its strong free cash flow, consistent dividend growth, and limited operating profit volatility."

Strelzik added that he believed "FY2015 earnings expectations are appropriate and that Brinker will generate 10-15 percent earnings growth for the foreseeable future, largely driven by share repurchases."

While "relatively safe," Strelzik felt "there are more advantageous investment opportunities...as we see limited near-term earnings upside and Brinker’s ability to sustainably accelerate traffic is not without risk."

The report concluded with the firm’s FY2015 EPS at $3.08 which is in line with consensus, "while our FY2016 estimate of $3.53 is $0.03 above consensus."

The price target implied a 16x P/E multiple on the firm's FY2015 estimate, "which is a premium to its historical average multiple (13x-14x), but modestly below its current multiple (16x-17x)."

Brinker International, Inc. closed at $53.51 Thursday, up 0.72 percent.