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Brinker International, Inc. (EAT) Soars to 52-Week High, Time to Cash Out?
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Shares of Brinker International (EAT - Free Report) have been strong performers lately, with the stock up 25.9% over the past month. The stock hit a new 52-week high of $73.3 in the previous session. Brinker International has gained 68.8% since the start of the year compared to the 9.5% move for the Zacks Retail-Wholesale sector and the -1.2% return for the Zacks Retail - Restaurants industry.
What's Driving the Outperformance?
The stock has a great record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on April 30, 2024, Brinker International reported EPS of $1.24 versus consensus estimate of $1.15 while it beat the consensus revenue estimate by 0.15%.
For the current fiscal year, Brinker International is expected to post earnings of $4 per share on $4.35 billion in revenues. This represents a 41.34% change in EPS on a 5.13% change in revenues. For the next fiscal year, the company is expected to earn $4.47 per share on $4.48 billion in revenues. This represents a year-over-year change of 11.59% and 3%, respectively.
Valuation Metrics
Brinker International may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company has run ahead of itself.
On this front, we can look at the Zacks Style Scores, as they provide investors with an additional way to sort through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. Investors should consider the style scores a valuable tool that can help you to pick the most appropriate Zacks Rank stocks based on their individual investment style.
Brinker International has a Value Score of A. The stock's Growth and Momentum Scores are A and B, respectively, giving the company a VGM Score of A.
In terms of its value breakdown, the stock currently trades at 18.2X current fiscal year EPS estimates, which is not in-line with the peer industry average of 19.1X. On a trailing cash flow basis, the stock currently trades at 11X versus its peer group's average of 9.9X. Additionally, the stock has a PEG ratio of 0.88. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
Zacks Rank
We also need to consider the stock's Zacks Rank, as this supersedes any trend on the style score front. Fortunately, Brinker International currently has a Zacks Rank of #2 (Buy) thanks to rising earnings estimates.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if Brinker International fits the bill. Thus, it seems as though Brinker International shares could have potential in the weeks and months to come.
How Does EAT Stack Up to the Competition?
Shares of EAT have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? One industry peer that looks good is El Pollo Loco Holdings, Inc. (LOCO - Free Report) . LOCO has a Zacks Rank of # 2 (Buy) and a Value Score of A, a Growth Score of C, and a Momentum Score of F.
Earnings were strong last quarter. El Pollo Loco Holdings, Inc. beat our consensus estimate by 57.14%, and for the current fiscal year, LOCO is expected to post earnings of $0.71 per share on revenue of $475.66 million.
Shares of El Pollo Loco Holdings, Inc. have gained 3.3% over the past month, and currently trade at a forward P/E of 15.06X and a P/CF of 8.82X.
The Retail - Restaurants industry may rank in the bottom 66% of all the industries we have in our universe, but there still looks like there are some nice tailwinds for EAT and LOCO, even beyond their own solid fundamental situation.
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Brinker International, Inc. (EAT) Soars to 52-Week High, Time to Cash Out?
Shares of Brinker International (EAT - Free Report) have been strong performers lately, with the stock up 25.9% over the past month. The stock hit a new 52-week high of $73.3 in the previous session. Brinker International has gained 68.8% since the start of the year compared to the 9.5% move for the Zacks Retail-Wholesale sector and the -1.2% return for the Zacks Retail - Restaurants industry.
What's Driving the Outperformance?
The stock has a great record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on April 30, 2024, Brinker International reported EPS of $1.24 versus consensus estimate of $1.15 while it beat the consensus revenue estimate by 0.15%.
For the current fiscal year, Brinker International is expected to post earnings of $4 per share on $4.35 billion in revenues. This represents a 41.34% change in EPS on a 5.13% change in revenues. For the next fiscal year, the company is expected to earn $4.47 per share on $4.48 billion in revenues. This represents a year-over-year change of 11.59% and 3%, respectively.
Valuation Metrics
Brinker International may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company has run ahead of itself.
On this front, we can look at the Zacks Style Scores, as they provide investors with an additional way to sort through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. Investors should consider the style scores a valuable tool that can help you to pick the most appropriate Zacks Rank stocks based on their individual investment style.
Brinker International has a Value Score of A. The stock's Growth and Momentum Scores are A and B, respectively, giving the company a VGM Score of A.
In terms of its value breakdown, the stock currently trades at 18.2X current fiscal year EPS estimates, which is not in-line with the peer industry average of 19.1X. On a trailing cash flow basis, the stock currently trades at 11X versus its peer group's average of 9.9X. Additionally, the stock has a PEG ratio of 0.88. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
Zacks Rank
We also need to consider the stock's Zacks Rank, as this supersedes any trend on the style score front. Fortunately, Brinker International currently has a Zacks Rank of #2 (Buy) thanks to rising earnings estimates.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if Brinker International fits the bill. Thus, it seems as though Brinker International shares could have potential in the weeks and months to come.
How Does EAT Stack Up to the Competition?
Shares of EAT have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? One industry peer that looks good is El Pollo Loco Holdings, Inc. (LOCO - Free Report) . LOCO has a Zacks Rank of # 2 (Buy) and a Value Score of A, a Growth Score of C, and a Momentum Score of F.
Earnings were strong last quarter. El Pollo Loco Holdings, Inc. beat our consensus estimate by 57.14%, and for the current fiscal year, LOCO is expected to post earnings of $0.71 per share on revenue of $475.66 million.
Shares of El Pollo Loco Holdings, Inc. have gained 3.3% over the past month, and currently trade at a forward P/E of 15.06X and a P/CF of 8.82X.
The Retail - Restaurants industry may rank in the bottom 66% of all the industries we have in our universe, but there still looks like there are some nice tailwinds for EAT and LOCO, even beyond their own solid fundamental situation.