Core Insights - Piper Sandler's "Macro Select" stock-picking model significantly outperformed the S&P 500 in 2025, achieving a return of approximately 22% compared to the S&P 500's 16% gain [1] - The updated Macro Select list for 2026 focuses on stocks with strong earnings surprises, earnings revisions, attractive earnings yield, and high return on equity (ROE) [3] Stock Performance - AT&T Inc. (Ticker: T) in the Communication Services sector had a 1-year return of 10% [5] - Graham Holdings (Ticker: GHC) in the Consumer Discretionary sector had a 1-year return of 4% [6] - Par Pacific Holdings (Ticker: EAT) in the Consumer Discretionary sector had a 1-year return of 12% [7] - Deluxe Corporation (Ticker: PARR) in the Energy sector had a 1-year return of 13% [8] - Mueller Water Products (Ticker: MWA) in the Industrials sector had a 1-year return of 14% [10] - Kilroy Realty (Ticker: KRC) in the Real Estate sector had a 1-year return of 6% [11] - UGI Corporation (Ticker: UGI) in the Utilities sector had a 1-year return of 33% [12] - Clearway Energy (Ticker: CWEN) in the Utilities sector had a 1-year return of 23% [13]

Core Viewpoint - Brinker International, Inc. (NYSE:EAT) is recognized as one of the best restaurant stocks to buy currently, with a positive outlook from analysts due to its strong performance in the casual dining segment [1]. Analyst Sentiment - As of January 6, 2026, approximately 45% of analysts are bullish on Brinker International, with a median price target of $170.00, indicating a potential upside of 13.70% [2]. - On December 23, 2025, David Palmer from Evercore ISI highlighted Brinker as a preferred stock, emphasizing its strong execution and effective value positioning in the casual dining segment, which is more resilient compared to fast food amid consumer challenges [3]. - Wells Fargo raised its price target for Brinker from $160 to $175 on December 17, 2025, maintaining an "Overweight" rating, citing favorable conditions for early 2026 due to stimulus effects and attractive valuation [4]. - JPMorgan also holds an "Overweight" rating on Brinker with a price target of $160, indicating confidence in the stock despite industry challenges [4]. Company Focus - Brinker International is primarily engaged in owning, developing, and franchising the Chili's Grill and Bar and Maggiano's Little Italy restaurant brands [5].

Core Insights - The retail sector is stabilizing after a volatile year characterized by inflation, high borrowing costs, and cautious consumer spending, with some retailers achieving double-digit gains driven by holiday optimism and improving fundamentals [1][2] Retail Sector Performance - The recent rally in retail stocks is momentum-driven rather than purely sentiment-driven, with investors favoring companies that show progress in margins, inventory management, and traffic trends [2] - Retail stocks have not reached uncomfortable valuation levels, with many trading below historical price-to-earnings multiples and supported by favorable earnings estimates [3] Notable Retail Stocks - Victoria's Secret & Co. (VSCO) has seen a stock increase of 16.5% due to its successful "Path to Potential" strategy, which revitalizes its core business and enhances profitability [7][8] - Five Below, Inc. (FIVE) has risen 14.4%, benefiting from increased foot traffic and AI-driven inventory management [8][14] - American Eagle Outfitters, Inc. (AEO) has climbed 13.6%, driven by strong performance in its Aerie brand and effective marketing strategies [8][17] - Brinker International, Inc. (EAT) has increased by 11.5%, supported by strong same-store sales and positive traffic growth [8][20] Earnings Estimates and Valuations - Victoria's Secret's earnings estimates have increased by $0.10 to $2.63 for the current fiscal year and by $0.16 to $2.90 for the next fiscal year [10] - Five Below's earnings estimates have risen by $0.31 to $5.84 for the current fiscal year and by $0.14 to $6.12 for the next fiscal year [14] - American Eagle's earnings estimates have increased by $0.03 to $1.33 for the current fiscal year and by $0.04 to $1.58 for the next fiscal year [17] - Brinker International's earnings estimates have increased by $0.03 to $10.23 for the current fiscal year and by $0.03 to $11.74 for the next fiscal year [20] Technical Setup - Victoria's Secret is trading at a forward P/E of 21.18, below its one-year high, indicating supportive valuation [11] - Five Below is trading at a forward P/E of 32.86, which remains reasonable relative to its one-year peak [14] - American Eagle is trading at a forward P/E of 17.35, still below its one-year high [17] - Brinker International is trading at a forward P/E of 14.17, below its one-year peak, suggesting reasonable valuation [21]

Company Overview - Brinker International, Inc. is a leading operator in the U.S. casual dining industry, recognized for its brands Chili's Grill & Bar and Maggiano's Little Italy [1] Industry Insights - The casual dining sector is characterized as mature and highly competitive, influenced by changing consumer preferences and market dynamics [1]

Core Viewpoint - Brinker International (EAT) has shown a positive performance over the past year, with a 14% increase, although recent performance has been more volatile [1] Company Performance - The company has successfully reinvigorated its Chili's brand, making it one of the top-performing brands in the industry [1]

Core Viewpoint - Brinker International, Inc. continues to attract investor interest, with BMO Capital maintaining a "Market Perform" rating and raising its price target from $140 to $170 [1][6] Company Performance - EAT's stock price closed at $149.48, reflecting a 1.35% decrease, contrasting with gains in the broader market [2][6] - Over the past month, EAT's shares have appreciated by 7.88%, significantly outperforming the Retail-Wholesale sector's decline of 1.59% [2][5] Earnings Expectations - Analysts anticipate an earnings per share (EPS) of $2.51, indicating a 10.36% decline year-over-year, while revenue is expected to increase by 3.12% to $1.4 billion [3][6] Stock Volatility - The stock has shown volatility, with daily price fluctuations between $146.54 and $151.99, and a yearly range from $100.30 to $192.22 [4] - Brinker International currently has a market capitalization of approximately $6.64 billion, with a trading volume of 945,919 shares on the NYSE [4]

Company Overview - Brinker International, Inc. (NYSE:EAT) is a casual dining restaurant company that has faced challenges in 2025, similar to its peers in the restaurant industry [2]. Stock Performance - Year-to-date, Brinker International's shares have increased by 5%, with a significant 41% rise occurring since early November [2]. - Mizuho maintained an Outperform rating for Brinker International, with a share price target of $155, indicating potential for same-store sales growth despite industry struggles [2]. Market Context - The broader restaurant industry is experiencing difficulties, with companies like Texas Roadhouse also facing challenges due to rising costs and pricing strategies [3]. - Jim Cramer expressed caution regarding Brinker International, suggesting a wait-and-watch approach for investors [2][3].

Core Viewpoint - Wall Street analysts' recommendations significantly influence investors' decisions regarding Brinker International (EAT), but the reliability of these recommendations is questionable [1][5]. Brokerage Recommendations - Brinker International has an average brokerage recommendation (ABR) of 1.95, indicating a rating between Strong Buy and Buy, based on 21 brokerage firms' recommendations [2]. - Out of the 21 recommendations, 11 are classified as Strong Buy, accounting for 52.4% of the total recommendations [2]. Analyst Bias and Reliability - Brokerage analysts tend to exhibit a positive bias in their ratings due to vested interests, often issuing more favorable ratings than warranted by their research [6][11]. - For every "Strong Sell" recommendation, there are five "Strong Buy" recommendations, indicating a potential misalignment with retail investors' interests [6]. Zacks Rank vs. ABR - The Zacks Rank, a proprietary stock rating tool, is based on earnings estimate revisions and is considered a more reliable indicator of near-term stock performance compared to ABR [8][12]. - Zacks Rank is displayed in whole numbers (1 to 5) and is distinct from ABR, which is typically shown in decimals [10]. Earnings Estimates and Stock Performance - The Zacks Consensus Estimate for Brinker International's earnings has increased by 0.3% over the past month to $10.23, reflecting analysts' growing optimism [14]. - The recent change in consensus estimates, along with other factors, has resulted in a Zacks Rank 2 (Buy) for Brinker International, suggesting potential for stock appreciation [15].

Core Insights - Brinker International, Inc. (EAT) reported a strong quarter with Chili's achieving 13% traffic growth in Q1 fiscal 2026, significantly outperforming the casual dining industry [1][11] - The sustainability of this growth is questioned, but management suggests it reflects structural gains rather than just promotional timing [2][5] Management Commentary - Chili's has outperformed the industry in traffic for eight consecutive quarters, indicating consistent execution rather than temporary boosts [2] - Traffic growth is attributed to everyday value, improved food quality, and better in-restaurant execution, rather than reliance on short-term discounts [2] - The $10.99 value platform remains stable and profitable, with operational upgrades driving repeat visits [2] Cohort-Level Data - Management tracks monthly guest cohorts, showing stable return rates for both new and existing guests, which counters the idea that traffic spikes are solely due to promotions [3] - This data indicates that advertising-driven traffic is being retained, suggesting sustained engagement [3] Promotional Impact - While promotional timing does influence traffic, management noted that explicit value pricing leads to stronger traffic lifts compared to unpriced promotions [4] - This indicates that marketing strategies can affect traffic dynamics even within a structurally strong base [4] Comparison with Peers - Darden Restaurants (DRI) relies more on limited-time offers, which leads to softer traffic trends when promotions rotate, indicating a dependence on timing [6] - Texas Roadhouse (TXRH) maintains traffic resilience through consistent execution and service culture, but its higher prices make it vulnerable to economic slowdowns [7] - EAT's Chili's stands out as its traffic growth appears more structural, supported by everyday value and operational improvements, placing it between DRI's promotional reliance and TXRH's execution-led model [8] Price Performance and Valuation - EAT's shares have increased by 14.2% over the past three months, outperforming the industry's 1% growth [9] - EAT is currently trading at a forward 12-month price-to-earnings ratio of 12.99, significantly lower than the industry average of 23.94 [12] - The Zacks Consensus Estimate for EAT's fiscal 2026 earnings per share has seen an increase over the past 30 days [15]

Core Insights - Brinker International (EAT) is experiencing strong performance at Chili's, driven by increased traffic, effective marketing, and improvements in food quality and in-restaurant experience [1] - The company's shares have risen by 18.1% over the past three months, significantly outperforming the Zacks Retail - Restaurants industry's growth of 1.4% [2] - Fiscal 2026 earnings estimates have increased slightly to $11.74 per share, reflecting improving operating efficiencies and margin expansion despite challenges from rising costs and inflation [3] Factors Supporting Performance - Sales growth is being driven by a disciplined focus on food, service, and atmosphere, with consistent price-pointed offerings and strategic marketing initiatives [5] - In Q1 FY26, total revenues reached $1.35 billion, an 18.5% year-over-year increase, with same-store sales growth of 21.4% and a 13.1% increase in traffic [6] - Remodeling efforts are underway to enhance brand identity and guest experience, with pilot projects expected to complete by the end of the current quarter [10] - Menu innovation is contributing to traffic and brand relevance, with notable sales increases in upgraded offerings such as ribs and frozen Patrón Margaritas [11] Challenges Facing the Company - Total operating costs rose to $1.23 billion in Q1 FY26, up from $1.08 billion the previous year, indicating pressure from elevated costs [12] - Commodity inflation, particularly in food and beverages, has negatively impacted margins, with expectations for mid-single-digit inflation rates for fiscal 2026 [13]