Northcoast Upgrade Sends Brinker International Up 4%

Brinker International (NYSE: EAT) shares climbed as much as 6.5% on Wednesday after Northcoast upgraded the stock from neutral to buy, citing strong growth at Chili's. As of 11:29 a.m. ET, the stock was up 4%.

Northcoast analyst Jim Sanderson set a price target of $275 on the Chili's parent, implying 37% upside over the next year.

Sanderson argued that Chili's is well-positioned for long-term growth under new management. He also pointed to menu improvements and better marketing as reasons the company can push in-store margins above 20%.

Chili's has ranked among the top-performing restaurant stocks, both on the market and in its operating results. The chain has taken market share through advertising campaigns touting better value than fast-food rivals like McDonald's, backed by a refreshed menu.

The pace is cooling. Same-store sales growth has come down from the peak of its surge, when it ran above 20%. Brinker closed fiscal 2026, which ended in July, with 8.1% comparable sales growth across the company and 9.2% at Chili's. Maggiano's, the company's other brand, continues to struggle with negative comparable sales.

The hypergrowth chapter may be ending, but Sanderson's case rests on the company's ability to sustain superior margins rather than on explosive sales gains.

Brinker's own targets support that thesis. Through fiscal 2029, the company is aiming for 4%–6% annual revenue growth, including 2%–3% unit growth with 30 new restaurants opening annually. Management also guided to double-digit annual adjusted EPS growth, helped by repurchasing 3%–5% of its shares each year.

The buyback plan matters. Shrinking the share count by up to 5% a year compounds the per-share earnings growth without requiring an acceleration in sales — a structure that fits a company transitioning from turnaround story to steady compounder.

The margin target is the harder test. Clearing 20% in-store margins requires Chili's to hold the traffic gains won from fast-food competitors even as its same-store growth normalizes toward the company average. Maggiano's remains a drag with negative comparable sales, leaving Chili's to carry nearly all of the operating momentum.

The market's verdict on Wednesday was positive but measured: the stock gave back part of its early 6.5% gain by late morning. If Brinker executes on its fiscal 2029 targets — steady revenue growth, disciplined unit expansion and aggressive buybacks — the stock should continue to move higher.