EAT

Brinker International Inc

Consumer


Presented:01/26/2018
Price:$38.77
Cap:$1.89B
Current Price:$89.53
Cap:$4.01B

Presented

Date01/26/2018
Price$38.77
Market Cap$1.89B
Ent Value$2.95B
P/E Ratio14x
Book ValueN/A
Div Yield3.92%
Shares O/S48.73M
Ave Daily Vol1,713,095
Short Int37.77%

Current

Price$89.53
Market Cap$4.01B
Brinker International, Inc. is a casual dining restaurant company, which engages in owning, developing, and franchising Chili's Grill and Bar and Maggiano's Little Italy restaurant brands. It operates through the following segments: Chili's, and Maggiano's. The Chili's segment includes the results of company-owned Chili's restaurants in the U.S. and Canada as well as the results from domestic and international franchise business. The Maggiano's segment comprises the results of company-owned Maggiano's restaurants. The company was founded by Larry Lavine on March 13, 1975 and is headquartered in Dallas, TX.

Publicly traded companies mentioned herein: Brinker International Inc (EAT),

Highlights

The presenter is short shares of Brinker International (EAT), and sees the risk/ reward as favorable at ~$38 - $39 per share. He believes casual dining will continue to lose share, and Chili’s (87% of EAT’s sales) is no longer a differentiated concept. And, while Maggiano’s (the other 13% of sales), is somewhat differentiated, it is tied to malls. Overall, he believes there are too many headwinds facing the Tex-Mex/Bar & Grille style restaurant chain for it to be successful. Changing consumer behavior and preferences, competition, delivery, and cost pressures will likely weigh on EBITDA and margins, and the company’s leverage will limit its flexibility. If the presenter’s model is accurate, EAT might only generate $3.00 of EPS in 2020, versus the consensus estimate of $3.75 - $4.00. Using a 10x forward multiple implies a 12-month price target of $30.

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Idea Discussion

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