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Brinker International (EAT) Laps the Stock Market: Here's Why

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Brinker International (EAT - Free Report) closed the most recent trading day at $83.48, moving +1.18% from the previous trading session. The stock's change was more than the S&P 500's daily gain of 0.61%. Elsewhere, the Dow gained 0.97%, while the tech-heavy Nasdaq added 0.33%.

Heading into today, shares of the operator of restaurant chains Chili's Grill & Bar and Maggiano's Little Italy had gained 19.08% over the past month, outpacing the Retail-Wholesale sector's gain of 5.88% and the S&P 500's gain of 5.36% in that time.

Market participants will be closely following the financial results of Brinker International in its upcoming release. The company's earnings per share (EPS) are projected to be $0.64, reflecting a 128.57% increase from the same quarter last year. Our most recent consensus estimate is calling for quarterly revenue of $1.08 billion, up 6.9% from the year-ago period.

For the entire fiscal year, the Zacks Consensus Estimates are projecting earnings of $4.68 per share and a revenue of $4.58 billion, representing changes of +14.15% and +3.76%, respectively, from the prior year.

It is also important to note the recent changes to analyst estimates for Brinker International. These revisions typically reflect the latest short-term business trends, which can change frequently. Therefore, positive revisions in estimates convey analysts' confidence in the company's business performance and profit potential.

Empirical research indicates that these revisions in estimates have a direct correlation with impending stock price performance. To capitalize on this, we've crafted the Zacks Rank, a unique model that incorporates these estimate changes and offers a practical rating system.

The Zacks Rank system, stretching from #1 (Strong Buy) to #5 (Strong Sell), has a noteworthy track record of outperforming, validated by third-party audits, with stocks rated #1 producing an average annual return of +25% since the year 1988. The Zacks Consensus EPS estimate has moved 0.75% higher within the past month. Currently, Brinker International is carrying a Zacks Rank of #3 (Hold).

Investors should also note Brinker International's current valuation metrics, including its Forward P/E ratio of 17.64. This indicates a discount in contrast to its industry's Forward P/E of 21.56.

Investors should also note that EAT has a PEG ratio of 1.33 right now. The PEG ratio is akin to the commonly utilized P/E ratio, but this measure also incorporates the company's anticipated earnings growth rate. The Retail - Restaurants was holding an average PEG ratio of 2.07 at yesterday's closing price.

The Retail - Restaurants industry is part of the Retail-Wholesale sector. This industry, currently bearing a Zacks Industry Rank of 158, finds itself in the bottom 38% echelons of all 250+ industries.

The Zacks Industry Rank evaluates the power of our distinct industry groups by determining the average Zacks Rank of the individual stocks forming the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.


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