Brinker International’s Chili’s Turnaround Shows Strong Momentum Yet Remains Undervalued
Brinker International has successfully turned around the Chili’s chain, though its full potential remains untapped, according to Jefferies. The firm upgraded the stock from Hold to Buy and raised its price target to $255 from $230, indicating a 26% upside from Tuesday’s close. ‘We see a clear shift from a turnaround to a sustainable, compounding growth story,’ analyst Alexander Slagle said in a note to clients. ‘Value creation opportunities are underappreciated as the higher‑volume, higher‑margin platform generates a reinvestment flywheel that can drive years of consistent growth and share appreciation.’ Over recent years, Chili’s has boosted sales by strengthening its social media presence, refreshing its menu offerings, and adopting value‑focused advertising. The stock has risen 41% year‑to‑date and is on track for a fourth consecutive year of gains. Nonetheless, the share price still has significant upside as the company continues to implement initiatives that attract new diners and retain existing customers. Approximately 40% of Chili’s menu remains to be refreshed, a step that could further enhance stock performance, Slagle noted. Jefferies’ recommendation aligns with Wall Street consensus; among the 23 analysts covering Brinker International, 20 have a Buy or Strong Buy rating, while three maintain a Hold rating, according to LSEG data.
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