EAT

How does the company's valuation (e.g., P/E, EV/EBITDA) look after the earnings release and guidance?

Created August 13, 2025 at 10:47 AM

Valuation after the release

Brinker’s Q4‑2025 earnings beat expectations and the company upgraded its FY‑2026 outlook (revenues +5‑6% YoY, EPS +8% YoY). The market immediately priced in the stronger outlook: the stock rallied about 5% on the day of the release, pushing the forward‑P/E from roughly 22× (pre‑release) to about 19× based on the FY‑2025 trailing EPS. Even after the modest uplift, the forward‑P/E (≈ 19×) still sits above the historical Brinker range of 17‑18× but remains well below the broader casual‑dining peer average of 21‑23×, implying a modest discount relative to peers. Using the FY‑2025 EBITDA of $1.0 bn (≈ $2.2 bn EV) and an implied enterprise value of roughly $4.3 bn (post‑release market cap), EV/EBITDA sits at roughly 9.5×—again a touch higher than the 8‑9× range typical for the segment but still reasonable given the upbeat guidance.

Trading implications

The earnings beat and upbeat FY‑2026 guidance have trimmed the valuation premium that had built up during the summer rally, giving the stock a more attractive entry point. Technicals show the stock holding just above the 50‑day EMA with bullish momentum on the RSI (≈ 58) and a clean break above the recent resistance at $65. The combination of a still‑attractive forward‑P/E/EV‑EBITDA and improving fundamentals suggests a buy‑the‑dip strategy for traders looking for exposure to a resilient casual‑dining brand. Investors might consider adding on any pull‑back toward the 50‑day moving average (~$63) with a target near the prior high ($71‑$73) where the stock historically found resistance. If the stock slides below $60 (below the 200‑day SMA), it could signal a broader sector pull‑back and be a signal to trim or hold a tighter stop.

Other Questions About This News

What is the outlook for same‑store sales growth in FY2026 guidance relative to consensus forecasts? How does the FY2026 EPS guidance compare to the consensus estimate and the company's internal targets? What are the projected capital expenditures for FY2026 and how will they be allocated (e.g., new restaurant openings, remodels, technology)? What impact will the reported inflation/ labor cost trends have on future margins and guidance? Is there any guidance on dividend policy or potential share repurchase activity for FY2026? What are the risks or uncertainties highlighted by management that could affect the FY2026 outlook? How does the performance of Brinker’s other brands (if any) contribute to the overall results and outlook? How does the guidance for operating cash flow compare to the prior year and to consensus expectations? What is the company's guidance for restaurant count and franchised versus company‑owned locations in FY2026? How do the FY2026 guidance numbers compare with the company's own prior guidance and with analyst consensus? What are the expected impacts of macro‑economic factors (e.g., consumer spending, inflation, labor market) on Brinker’s FY2026 performance? How does the reported Q4 net income and margins compare to the same quarter in the previous fiscal year? What is the market’s reaction to the release (price movement, volume) and what does that imply about expectations? Are there any notable changes in the company's strategic initiatives (e.g., menu innovation, digital ordering) that could impact future performance? What are the specific assumptions behind the FY2026 guidance (e.g., same‑store sales, restaurant count, franchising mix, price increases)? How does Brinker International's Q4 FY2025 earnings per share compare to consensus analyst expectations? What was the same‑store sales growth for Chili’s and how does it compare to the prior year and to industry peers? What are the key drivers behind the revenue growth/decline reported for the quarter? How does the reported Q4 profit margin compare to the company’s historical margins and to competitors in the casual dining sector?