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Investing.com --Evercore ISI upgraded Brinker International to Outperform from In Line and raised its price target to $210 from $190, saying the Chili’s owner is poised for sustainable earnings growth driven by restaurant remodels, menu upgrades, and new unit openings.
The brokerage lifted its long-term earnings forecasts, projecting 17% annual growth in EPS through fiscal 2027. That estimate factors in 5% same-store sales growth at Chili’s, 2% net unit expansion, operating margin gains and 5% to 6% annual share reductions, supported by a balance sheet it called “clean” at 0.5 times net debt to EBITDA.
Evercore said recent sales trends support higher near-term estimates. It now expects fiscal first-quarter same-store sales to rise 20%, above its prior 17% forecast and consensus of 18%, and raised EPS estimates to $1.74 from $1.58.
Growth drivers include a string of menu updates, such as revamped ribs, margaritas and chicken sandwiches, alongside heavier advertising and service investments.
Brinker is also beginning a fleet reimaging program, with four remodels slated this year before expanding to 10% of its stores annually from 2027, which Evercore estimates could add 1% to traffic growth.
The firm compared Brinker’s turnaround strategy to that of Texas Roadhouse, noting similarities in labor and service investments but cautioning that pricing discipline will be key. It highlighted the risk that pushing Chili’s “high-low” pricing model too aggressively could erode value perception.
At just under 15 times forward earnings, Evercore said Brinker trades below peers such as Darden Restaurants, and saw scope for multiple expansion as growth proves sustainable. It set a $210 price target, based on 17 times its 2027 EPS forecast of $12.19.