Restaurant operator Brinker International (EAT) shares traded to new all-time highs after the company’s latest earnings report and outlook.
Brinker saw a massive 183% increase in its year over year earnings per share as results were $0.94 better than analysts target of $2.80. The strong results were driven by a revenue increase of 27%, almost double last quarter’s revenue growth.
The company’s management pointed to incredibly strong comparable revenue from the Chili’s and Maggiano’s chains. Consumers have continued to respond well to menu and pricing changes that the company has executed.
In the case of Chili’s, the return of value menu items have drawn visitors through the doors as consumers continue to battle with higher prices as the grocery.
Brinker says its marketing department is doing a great job of focusing on value, bringing guests in and putting Chili’s back in mainstream culture again.
Brinker has been bucking the broader trend in restaurant stocks with huge back-to-back earnings beats. As a result, the stock rallied more than 135% since October.
Brinker’s new highs put the stock above $175, forming a new technical breakout rally.
The stock surged above its top Bollinger Band on Wednesday on much stronger than average trading volume. The breakout suggests that the stock will continue its sharp move higher as investors chase the breakout.
EAT shares have seen two similar breakouts since September, both resulting in 30% moves over the following 45 trading days.
From the long-term perspective, Brinker hares have traded in a strong bull market trend since November 2024 and maintain that outlook with a price target of $250.
— Chris Johnson
Karim Rahemtulla, the trader behind a 400% gain in 24-months on Rolls-Royce, has uncovered another potential multi-bagger. This under-$20 stock gives you exposure to over 1-oz of gold with the lowest production costs in the industry. And an upcoming announcement could send this stock soaring. Get Karim's urgent briefin - click here now.
Source: Money Morning