Brinker International downgraded as Goldman anticipates slowing sales

Brinker International downgraded as Goldman anticipates slowing sales


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Brinker International (NYSE:EAT) shares see-sawed on Monday after a downgrade from Goldman Sachs.

The bank’s analysts explained that while shares have fallen sharply in the past year and remains at a significant discount to historical averages, its sales trends seem to justify the decline. Further, impacts in terms of inflation and generally worsening economic trends continue to weigh on shares.

“We downgrade EAT to Neutral from Buy as we see greater risk for [same store sales] trends at both Chili’s and Maggiano’s to decelerate as the macro environment deteriorates, and believe that incremental gains (both sales and margins) from EAT’s digital brands may be harder to achieve in a more cost-sensitive environment for consumers,” the note explained. “[We] expect the stock could be volatile as estimates reset [and] macro trends evolve.”

Alongside the downgrade, a $28 price target was assigned to the stock, down significantly from the prior $46.

Shares of the Dallas-based restaurant chain began trading down sharply on Monday before rising to near flat amid a broader market rally. The stock traded slightly into the green in the waning hours of trading.

Read more on expectations for the second half of 2022 among restaurant stocks.

Quoted from Various Sources

Published for: Ipodifier