Piper Jaffray Initiates Coverage on Brinker International (EAT) with a Neutral; Survival Mode

April 28, 2009 9:29 AM EDT

Piper Jaffray & Co. initiates coverage on Brinker International (NYSE: EAT) with a Neutral. Price target $19.

Piper analyst says, "We hypothesize that casual-dining operators inherently succeed only in a favorable commodity, labor, and real estate market in conjunction with a healthy middle-class environment. The supply/demand equation needs to be rationalized. We expect sales to be fairly flat during FY09 and into FY10 based on continued negative same-store sales trends and no new (company-owned) unit growth. Earnings are primarily expected to grow as a result of lower debt balances (i.e., reduced interest expense) and cost cutting initiatives that are only sustainable in the short run."

Brinker International, Inc. (Brinker) owns, develops, operates and franchises the Chili’s Grill & Bar (Chili’s), On The Border Mexican Grill & Cantina (On The Border), Maggiano’s Little Italy (Maggiano’s) and Romano’s Macaroni Grill (Macaroni Grill) restaurant brands.

To see more analyst ratings on EAT Click Here.

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