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EAT Stock Surges 22% in a Month: Still Time to Buy or Stay Cautious?

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Brinker International, Inc. (EAT - Free Report) stock has risen 21.9% in the past month, outpacing the industry and the S&P 500’s growth of 2.1% and 6.2%, respectively. 

The ongoing increase in traffic continues to drive the company’s performance. Also, focus on menu adjustments bodes well.

Despite this impressive rally, the stock closed at $169.33 yesterday, still well below its 52-week high of $192.22 but far above the 52-week low of $56.27, a remarkable rebound. At the same time, shares of other industry players like Wingstop Inc. (WING - Free Report) , Shake Shack Inc. (SHAK - Free Report) and CAVA Group, Inc. (CAVA - Free Report) are up 37.6%, 25.9% and down 16.5%, respectively.

EAT’s Price Performance

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Technical indicators imply EAT's continued strong performance. The stock is trading above its 50-day moving average, signaling robust upward momentum and price stability. This technical strength underscores positive market sentiment and confidence in EAT's financial health and prospects.

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Factors Favoring EAT Stock

Brinker International is committed to boosting traffic and revenues through a series of strategic initiatives. These include simplifying and innovating menu, enhancing value offerings, improving food presentation, running impactful ad campaigns, optimizing kitchen systems and launching a more efficient service platform.

The company is currently benefiting from solid customer traffic. At Chili’s, same-store sales surged 31.6% year over year, with traffic up 20.9%. A major focus is the "Five-to-Drive" strategy, aimed at encouraging innovation and driving sustained growth. A standout in this strategy is the popular “3 for Me” value deal, which provides better value than traditional fast food and has been a strong traffic driver, attracting a wide range of guests who tend to return more often. 

Additionally, Chili’s is leveraging social media marketing to further support customer growth and engagement. Management expects these efforts to continue yielding positive results in the coming quarters.

Brinker is also advancing Chili’s international footprint through new and existing franchise partnerships. It is helping franchisees boost sales via virtual brand offerings as well. In fiscal 2024, nine new Chili’s restaurants were opened. For fiscal 2025, the company plans to open nine to 11 new domestic locations and 21-25 international outlets.

Operationally, Brinker implemented several efficiency-focused upgrades in the third quarter of fiscal 2025. These included menu streamlining, removing low-performing items and sauces, to reduce kitchen complexity and ease workflow. The burger category received special attention, with new training introduced to ensure quality ahead of a major launch. A new "all-day" feature in the kitchen display system improved order handling and response times. To address labor issues in the back of the house, leadership held feedback sessions with dishwashers, leading to actionable job improvements already in place, demonstrating the company’s focus on long-term productivity and team well-being.

Brinker’s Bottom Line Improves

EAT’s earnings trajectory is on a sharp upward trend, with projections signaling substantial growth ahead. The company is expected to deliver earnings of $8.76 per share in fiscal 2025, marking an astonishing 113.7% year-over-year surge. The momentum is set to carry into fiscal 2026, with earnings forecast to climb 9.2% to $9.57 per share.

This impressive earnings expansion highlights Brinker’s strong upside potential and reinforces confidence in the long-term growth story, positioning it for sustained success in the years ahead.

EAT Trades at a Discount

Brinker is trading at a discount on a forward 12-month price-to-earnings (P/E) ratio basis. EAT’s forward 12-month P/E ratio is 17.8X, which is lower than the industry.

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End Notes

Brinker’s recent stock performance reflects growing investor confidence in its strategic direction and operational execution. The company is effectively driving customer traffic and sales through targeted initiatives like menu innovation, value-driven campaigns and enhanced service systems. EAT’s strong focus on efficiency improvements, such as kitchen optimization and streamlined training, positions it well to handle increased volumes without compromising quality. At the same time, international expansion and digital marketing efforts are creating new growth avenues. 

With earnings expected to rise significantly and the stock still trading at a relative discount, EAT presents a compelling opportunity for investors seeking a fundamentally strong and attractively valued growth story. The company currently carries a Zacks Rank #2 (Buy).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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