Wachovia Upgrades Brinker International (EAT) to Outperform; Raises Estimates & Valuation Range

April 7, 2009 7:32 AM EDT

Wachovia upgrades Brinker International, Inc. (NYSE: EAT) from Market Perform to Outperform.

Wachovia analyst says, "We are upgrading our rating on EAT shares to Outperform following a much better than expected pre-release for FQ3 EPS results, which was driven primarily by cost improvements. We are particularly encouraged by management’s commentary in the release that Brinker’s positive momentum with regard to managing costs is expected to continue into 2010, and we think that the company could potentially achieve even greater leverage from these cost-control efforts once sales stabilize...We are raising our FQ3 and FY2009 EPS estimates to $0.44 from $0.28 and to $1.36 from $1.13. We are also raising our FY2010 estimate to $1.62 from $1.23. Over the next 12 months, we think that Brinker shares may warrant a valuation range of $21-24 (up from $13-15 previously) based on the stock trading at 13-15x our CY2009 EPS estimate."

To see more analyst ratings on EAT Click Here.

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.

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