Baird initiated coverage of Brinker International Inc. (NYSE: EAT) with an outperform rating and a $325 price target, citing the company's completed turnaround at its Chili's brand. The restaurant operator's shares were trading at $246.06 at the time of the note, 3% below their 52-week high of $253.71.
The turnaround at Chili's, which included menu simplification, improved execution and hospitality, sharper value positioning and expanded advertising, has translated into stronger traffic, market share gains and greater profitability, Baird said. The firm noted a 5.6% increase in same-store sales for Chili's and a perfect Piotroski score of 9, indicating robust financial health according to InvestingPro data.
Baird's $325 target implies roughly 32% upside from current levels, while Brinker's fourth-quarter fiscal 2026 earnings per share is projected at $3.07, slightly below the consensus estimate of $3.09 due to softer restaurant margins. The company's 64% one-year return underscores investor confidence in the turnaround effort.
Other analysts have also raised their targets following the operational improvements. BMO Capital lifted its target to $230, KeyBanc to $275, UBS to $285, DA Davidson to $260 and BofA Securities to $310. A total of 14 analysts have revised their earnings estimates upward for the upcoming period.
Baird acknowledged the ongoing debate over whether Chili's has established durable consumer pull or merely benefited from a temporary boost driven by value messaging, advertising, social-media attention and weaker competitors. The firm maintained that the brand's operational improvements have positioned it for sustained performance.
