BRINKER INTERNATIONAL INC (NYSE:EAT) – A High Growth Momentum Stock with Strong Technical Setup

BRINKER INTERNATIONAL INC (NYSE:EAT) stands out as a potential candidate for high-growth momentum investors, combining strong earnings momentum with a favorable technical setup. The company, which operates Chili’s Grill & Bar and Maggiano’s Little Italy, has demonstrated impressive growth metrics while also presenting a consolidation pattern that may offer a strategic entry point.

Growth Momentum Highlights

• Earnings Growth: EAT reported a 105.6% year-over-year EPS growth (TTM), with recent quarterly EPS growth exceeding 114.5%. The past two quarters saw even stronger expansions of 182.8% and 239.3%.
• Revenue Growth: Sales increased by 19.8% over the past year, with recent quarterly sales growth at 27.2%. The company has consistently beaten revenue estimates in the last four quarters.
• Profit Margins: Quarterly profit margins improved to 8.36%, up from 3.38% two quarters ago, indicating better cost management and pricing power.
• Free Cash Flow: FCF surged by 516.7% over the past year, reflecting strong operational efficiency.
• Analyst Revisions: EPS estimates for the next year have been revised upward by 5.03% in the last three months, signaling confidence in continued growth.

Technical Strength & Setup

EAT holds a Technical Rating of 7, supported by:

• Relative Strength: Outperforming 95% of all stocks and 94% of its industry peers over the past year.
• Trend Stability: While the short-term trend has weakened recently, the long-term trend remains positive.
• Support Levels: Multiple support zones exist between $131.49 and $165.33, providing downside protection.

The Setup Rating of 7 suggests a consolidation phase, with:

• Tight Trading Range: Prices have been fluctuating between $162.40 and $187.12, offering a potential breakout opportunity.
• Reduced Volatility: The stock has stabilized near the lower end of its recent range, possibly setting up for a rebound.
• Entry & Exit Points: A suggested entry at $174.00 (above the 10-day moving average) with a stop-loss around $163.81 (below key support).

For a deeper technical breakdown, review the full technical report for EAT.

Our High Growth Momentum Breakout Setups Screen lists more stocks with similar characteristics and is updated daily.

Disclaimer

This is not investment advice. The observations here are based on current data, but market conditions can change. Always conduct your own research before making investment decisions.