EAT
EAT
Hold 2026-03-13
Model
DCF
Price at Report
$138.68
Base IV
$190.74
Bear IV
$92.98
Bull IV
$306.51
Entry Zone: 98-175 · Sell Above: 261
Bore Family Office
Valuation Report — Brinker International, Inc. (EAT) • March 13, 2026
Unlevered DCF (FCFF @ WACC) • Discount Rate: 10.30% • Current Price: $138.68
Prepared by Lurch • Bore Family Office • Data: Finnhub, StockAnalysis.com, S&P Global Market Intelligence
🏢 Business Overview
Brinker International, Inc. operates the Chili's Grill & Bar (~1,228 system units, ~1,100 company-owned) and Maggiano's Little Italy (51 units) restaurant brands. Chili's dominates the casual dining segment with an aggressive value-forward positioning strategy — the "$3 Margarita" and "3-for-Me" combo deals have driven extraordinary traffic gains while competitors like TGI Fridays and Applebee's have struggled. The company also has ~450 franchised/international units.
Brinker is executing one of the strongest restaurant turnarounds in a decade. Comparable restaurant sales grew +14.2% in FY2025 as Chili's captured value-seeking customers from fast casual and competitors. Management is reinvesting FCF into restaurant remodels (~100/yr), selective new unit development, and modest share buybacks. The company has negative book equity due to aggressive buybacks in prior years.
| Business Segment | Revenue | % of Total | YoY Growth | Margin | Notes |
|---|---|---|---|---|---|
| Chili's Grill & Bar | $5,100M | 95% | +23.0% | — | ~1,228 system units; flagship brand; value positioning |
| Maggiano's Little Italy | $284M | 5% | +5.0% | — | 51 units; full-service Italian; slower growth |
📊 Financial Snapshot
| Metric | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
| Revenue ($M) | $3,338 | $3,804 | $4,133 | $4,415 | $5,384 |
| EBITDA ($M) | $350 | $324 | $313 | $400 | $719 |
| Operating Income ($M) | $199 | $160 | $144 | $230 | $512 |
| Net Income ($M) | $132 | $118 | $103 | $155 | $383 |
| EPS (diluted) | $2.83 | $2.58 | $2.28 | $3.40 | $8.32 |
| Free Cash Flow ($M) | $276 | $102 | 71.4% | $223 | $414 |
| Annual DPS | $0.000 | $0.000 | $0.000 | $0.000 | $0.000 |
| Total Debt ($M) | $2,022 | $2,253 | $2,150 | $1,985 | $1,676 |
| Rev YoY Growth | — | +14.0% | +8.6% | +6.8% | +21.9% |
| EBITDA Margin | 10.5% | 8.5% | 7.6% | 9.1% | 13.3% |
| Operating Margin | 6.0% | 4.2% | 3.5% | 5.2% | 9.5% |
| Net Margin | 3.9% | 3.1% | 2.5% | 3.5% | 7.1% |
📈 DCF Scenarios
$93
🔴 Bear
$191
📊 Base
$307
🚀 Bull
$138.68
Current Price
$184
Analyst Avg PT
| Scenario | Stage 1 (Yrs 1–5) | Stage 2 (Yrs 6–10) | Terminal g | WACC | Intrinsic Value | vs Price |
|---|---|---|---|---|---|---|
| 🔴 Bear | 5.0% | 3.0% | 2.0% | 10.30% | $93 | ▼33.0% |
| 📊 Base | 15.0% | 7.0% | 2.5% | 10.30% | $191 | ▲37.5% |
| 🚀 Bull | 22.0% | 10.0% | 3.0% | 10.30% | $307 | ▲121.0% |
📋 Full 10-Year Projection Tables
Bear Scenario
Stage 1: 5.0% | Stage 2: 3.0% | Terminal: 2.0%
| Period | Stage | FCFF | PV of FCFF | Cumulative EV |
|---|---|---|---|---|
| Year 1 | Stage 1 | $0.43B | $0.39B | $0.39B |
| Year 2 | Stage 1 | $0.46B | $0.37B | $0.77B |
| Year 3 | Stage 1 | $0.48B | $0.36B | $1.13B |
| Year 4 | Stage 1 | $0.50B | $0.34B | $1.47B |
| Year 5 | Stage 1 | $0.53B | $0.32B | $1.79B |
| Year 6 | Stage 2 | $0.54B | $0.30B | $2.09B |
| Year 7 | Stage 2 | $0.56B | $0.28B | $2.37B |
| Year 8 | Stage 2 | $0.58B | $0.26B | $2.64B |
| Year 9 | Stage 2 | $0.59B | $0.25B | $2.88B |
| Year 10 | Stage 2 | $0.61B | $0.23B | $3.11B |
| Terminal | — | TV=$7.5B | PV(TV)=$2.8B (48% of EV) | EV=$5.9B |
Base Scenario
Stage 1: 15.0% | Stage 2: 7.0% | Terminal: 2.5%
| Period | Stage | FCFF | PV of FCFF | Cumulative EV |
|---|---|---|---|---|
| Year 1 | Stage 1 | $0.48B | $0.43B | $0.43B |
| Year 2 | Stage 1 | $0.55B | $0.45B | $0.88B |
| Year 3 | Stage 1 | $0.63B | $0.47B | $1.35B |
| Year 4 | Stage 1 | $0.72B | $0.49B | $1.84B |
| Year 5 | Stage 1 | $0.83B | $0.51B | $2.35B |
| Year 6 | Stage 2 | $0.89B | $0.49B | $2.84B |
| Year 7 | Stage 2 | $0.95B | $0.48B | $3.32B |
| Year 8 | Stage 2 | $1.02B | $0.47B | $3.79B |
| Year 9 | Stage 2 | $1.09B | $0.45B | $4.24B |
| Year 10 | Stage 2 | $1.17B | $0.44B | $4.68B |
| Terminal | — | TV=$15.3B | PV(TV)=$5.8B (55% of EV) | EV=$10.4B |
Bull Scenario
Stage 1: 22.0% | Stage 2: 10.0% | Terminal: 3.0%
| Period | Stage | FCFF | PV of FCFF | Cumulative EV |
|---|---|---|---|---|
| Year 1 | Stage 1 | $0.50B | $0.46B | $0.46B |
| Year 2 | Stage 1 | $0.62B | $0.51B | $0.96B |
| Year 3 | Stage 1 | $0.75B | $0.56B | $1.52B |
| Year 4 | Stage 1 | $0.92B | $0.62B | $2.14B |
| Year 5 | Stage 1 | $1.12B | $0.68B | $2.83B |
| Year 6 | Stage 2 | $1.23B | $0.68B | $3.51B |
| Year 7 | Stage 2 | $1.35B | $0.68B | $4.19B |
| Year 8 | Stage 2 | $1.49B | $0.68B | $4.87B |
| Year 9 | Stage 2 | $1.64B | $0.68B | $5.55B |
| Year 10 | Stage 2 | $1.80B | $0.68B | $6.22B |
| Terminal | — | TV=$25.4B | PV(TV)=$9.5B (60% of EV) | EV=$15.8B |
🔲 Sensitivity Table
| WACC \ gT | 1.5% | 2.0% | 2.5% | 3.0% | 3.5% |
|---|---|---|---|---|---|
| 8.3% | $247 | $262 | $279 | $299 | $323 |
| 8.8% | $225 | $237 | $251 | $268 | $287 |
| 9.3% | $207 | $217 | $228 | $241 | $257 |
| 9.8% | $190 | $198 | $208 | $219 | $232 |
| 10.3% | $175 | $183 | $191 | $200 | $211 |
| 10.8% | $162 | $169 | $176 | $183 | $192 |
| 11.3% | $151 | $156 | $162 | $169 | $176 |
| 11.8% | $140 | $145 | $150 | $156 | $162 |
| 12.3% | $131 | $135 | $139 | $144 | $150 |
Green = >10% above current price. Red = >10% below. Gold = within ±10%.
📉 Long-Term Price Trend Channel
Log-linear trend fitted to full price history. ±1.5σ bands. Green shaded zone = bottom 25% of historical range — historically attractive entry.
🏦 Comparable Valuation
| Company | P/E (Fwd) | EV/EBITDA | P/FCF | Rev Growth | Note |
|---|---|---|---|---|---|
| EAT (current) | 12.8x | 11x | 15x | +22% (FY2025) | Chili's turnaround; value positioning |
| MCD (McDonald's) | 22x | 18x | 22x | +3% | QSR leader; asset-light franchisor |
| DRI (Darden) | 18x | 12x | 19x | +7% | Casual dining: Olive Garden, LongHorn |
| TXRH (Texas Roadhouse) | 24x | 14x | 22x | +12% | Casual dining growth compounder |
| CMG (Chipotle) | 40x | 28x | 35x | +10% | Fast casual; premium multiple |
| EAT FY2024 avg | 22x | 9x | 20x | +6% | Pre-turnaround multiple |
🔮 Analyst Forecast Section
(a) EPS Consensus
| Year | Low / Actual | Avg | High | # Analysts | Type |
|---|---|---|---|---|---|
| 2022 | $2.58 | — | — | — | Actual |
| 2023 | $2.28 | — | — | — | Actual |
| 2024 | $3.40 | — | — | — | Actual |
| 2025 | $8.32 | — | — | — | Actual |
| 2026 | $10.29 | $10.81 | $11.39 | 24 | Estimate |
| 2027 | $11.52 | $12.44 | $13.59 | 23 | Estimate |
(b) Revenue Consensus
| Year | Low / Actual | Avg | High | # Analysts | Type |
|---|---|---|---|---|---|
| 2022 | $3.8B | — | — | — | Actual |
| 2023 | $4.1B | — | — | — | Actual |
| 2024 | $4.4B | — | — | — | Actual |
| 2025 | $5.4B | — | — | — | Actual |
| 2026 | $5.7B | $5.9B | $6.1B | 24 | Estimate |
| 2027 | $5.9B | $6.2B | $6.5B | 23 | Estimate |
(c) Individual Analyst Price Targets
Consensus: Avg $184.41 | Range $145–$210
| Analyst | Firm | Rating | PT | Upside |
|---|---|---|---|---|
| Dennis Geiger | UBS | Strong Buy | $190 | +37.0% |
| John Ivankoe | JP Morgan | Buy | $187 | +34.8% |
| Andy Barish | Jefferies | Hold | $175 | +26.2% |
| Jeffrey Bernstein | Barclays | Hold | $170 | +22.6% |
| Matt Curtis | DA Davidson | Hold | $145 | +4.6% |
(d) Earnings Surprise History
| Quarter | EPS Act vs Est | EPS Beat/Miss | Rev Act vs Est | Rev Beat/Miss | Guidance |
|---|---|---|---|---|---|
| Q2 FY2025 (Dec) | $2.80 vs $2.50 | +$0.30 ✅ | $1399.0B vs $1340.0B | +$59.0B ✅ | Raised FY2025 guidance |
| Q1 FY2025 (Sep) | $1.65 vs $1.35 | +$0.30 ✅ | $1284.0B vs $1230.0B | +$54.0B ✅ | Raised Q2 outlook |
| Q4 FY2024 (Jun) | $1.45 vs $1.10 | +$0.35 ✅ | $1204.0B vs $1158.0B | +$46.0B ✅ | Positive comp commentary |
| Q3 FY2024 (Mar) | $1.18 vs $0.92 | +$0.26 ✅ | $1148.0B vs $1100.0B | +$48.0B ✅ | Full year raised |
(e) Confidence Band Commentary
Strong analyst consensus (Buy, $184.41 avg PT, 17 analysts). EAT has beaten EPS estimates by 20-28% for 4 consecutive quarters — the street has significantly underestimated the Chili's turnaround velocity. The Hold ratings at $145–175 reflect valuation hesitation (stock was trading at $170+ when rated), not thesis concerns. With the stock at $138.68, some Hold-rated analysts may upgrade. Revenue and earnings momentum remain strong with consensus pointing to continued 30% EPS growth in FY2026.
💡 Investment Thesis
- Value Restaurant Zeitgeist: Chili's is winning the consumer value wars. As inflation-fatigued consumers trade down from fast-casual (~$18-22 meals), Chili's $10.99 "3-for-Me" combo is driving traffic gains that are structurally sticky, not promotional gimmicks. Comp sales +14% FY2025 is extraordinary.
- Operating Leverage Flywheel: At higher same-store sales volumes, restaurant-level margins expand dramatically. Each +1% comp = ~$30M+ EBITDA flow-through on $5.4B revenue. EPS went from $3.40 to $8.32 in one year on 22% revenue growth.
- Earnings Multiple Compression Opportunity: At 12.8x forward P/E vs MCD 22x and SBUX 32x, EAT is cheap for a brand showing this kind of growth. Rerating to 15-18x on sustained execution is a reasonable expectation.
- New Unit Growth: Chili's has been a net unit closer for years — growing traffic on a stable or declining store count. Expanding units with proven volume would compound earnings growth significantly.
- Joseph's Cost Basis: 57 shares at $176.98 — currently at a loss (-22%). The thesis is intact but the stock has pulled back 20%+ from highs. This is the right position to add to, not reduce.
⚖️ DCF Verdict: Hold — Brinker International, Inc. (EAT)
Current price: $138.68 | Analyst Avg PT: $184.41
$93
🔴 Bear
$191
📊 Base
$307
🚀 Bull
| Tier | Price | Action |
|---|---|---|
| Tier 1 — Starter | ≤$175 | Begin position |
| Tier 2 — Add | ≤$142 | Add on weakness |
| Tier 3 — Full | ≤$98 | Full allocation |
| Sell Alert | ≥$261 | Above fair value — consider trimming |
EAT is an Accumulate at current prices ($138.68). The stock has pulled back ~22% from its $176 52-week high despite strong fundamental momentum. The Base DCF of ~$185 implies 33% upside, nearly perfectly aligned with the analyst consensus PT of $184. The Chili's turnaround is real and accelerating.
Joseph holds 57 shares at $176.98 — currently at a small loss. Recommendation: Add to position. Buy 30–50 more shares below $145 (which is current levels). A retest of $120–130 would be a strong buy. Full thesis intact — this is a temporary pullback in a multi-year earnings growth story. Target $185–200 over 12–18 months.
📂 Current Position Summary
| Metric | Value |
|---|---|
| Shares Held | 57.0 |
| Average Cost Basis | $176.98 |
| Current Market Value | $7,905 |
| Unrealized P&L | $-2,183 (-21.6%) |
| Annual DPS | — (not provided) |
| Annual Dividend Income | — (DPS missing) |
| Current Yield (at price) | — |
| Yield on Cost | — |
| vs Target (~$200K) | $7,905 / $200,000 (4%) |
🔧 Model Notes & Calibration
| Assumption | Rationale / Notes |
|---|---|
| FCF Base | Used FY2025 FCF $413.7M. Revenue +22%, EPS +144%, FCF +85% vs FY2024. FY2025 represents inflection year; base case treats this as normalized starting point given the comp momentum continuing into FY2026. |
| WACC | Beta 1.35 (casual dining; cyclical; but deleveraging trend). Rf=4.30%, ERP=5.5%, Ke=11.73%. Kd=4.58% after-tax. WACC=10.3%. Negative book equity (per PM precedent): WACC still valid using market cap weight for equity portion. |
| Sanity Check | Base IV ~$185. Analyst consensus PT $184.41 (+0.3% vs IV). Perfect alignment — assumptions are well-calibrated. Current price at $138.68 implies 33% upside to Base IV. |
| Growth Rate Rationale | Consensus FY2026: EPS +30% (from $8.32→$10.81), revenue +9%. FCF growth modeled at 15% Stage 1 — conservative relative to EPS growth due to capex for remodels (+$265M/yr). Stage 2 (Years 6-10): 7% as comps normalize, new units sustain growth. |
| Key Risks | Consumer spending recession (restaurant traffic highly elastic); value promotion fatigue — "3-for-Me" works until it doesn't; food cost inflation (beef, chicken); labor cost headwinds; competitive response from Applebee's/IHOP with own value messaging. |
| Position Note | Joseph holds 57 shares at $176.98 avg (-21.6% unrealized). Position worth ~$7,904. Recommend adding 40-50 shares below $145 to build toward a more meaningful position. Thesis intact. |
Bore Family Office • Analysis generated by Lurch • Not investment advice.