Brinker International Inc’s (NYSE:EAT) most recent earnings announcement in June 2018 showed that the company faced a immense headwind with earnings deteriorating by -17%. Below, I’ve laid out key numbers on how market analysts perceive Brinker International’s earnings growth outlook over the next couple of years and whether the future looks brighter. I will be using net income excluding extraordinary items in order to exclude one-off volatility which I am not interested in.
Analysts’ outlook for the coming year seems buoyant, with earnings increasing by a robust 17%. However, earnings is forecasted to fall thereafter, reaching US$136m in 2021.
Although it’s useful to be aware of the growth rate year by year relative to today’s figure, it may be more beneficial evaluating the rate at which the earnings are rising or falling every year, on average. The pro of this technique is that we can get a better picture of the direction of Brinker International’s earnings trajectory over the long run, irrespective of near term fluctuations, be more volatile. To compute this rate, I’ve appended a line of best fit through analyst consensus of forecasted earnings. The slope of this line is the rate of earnings growth, which in this case is 5.1%. This means, we can presume Brinker International will grow its earnings by 5.1% every year for the next couple of years.
For Brinker International, I’ve put together three essential aspects you should further research:
- Financial Health: Does it have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk.
- Valuation: What is EAT worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether EAT is currently mispriced by the market.
- Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of EAT? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at email@example.com.