EAT Stock Price Target Lifted Before Earnings

Call buying has picked up on EAT stock in recent weeks

by Josh Selway

Published on Aug 12, 2019 at 9:54 AM

Restaurant stock Brinker International, Inc. (NYSE:EAT) has been underwhelming on the charts this year, giving back more than 9% in 2019. However, Evercore ISI came in this morning with a bull note, raising its price target to $42 from $40. The brokerage firm said same-store sales is the number to watch for the Chili's owner, adding that the company's DoorDash partnership could drive upside for the shares.

The bullish attention comes ahead of the company's earnings release tomorrow, Aug. 13, before the open. The stock has closed lower the day after earnings in the previous two quarters, and if you go back two years, it's averaged a post-earnings swing of 4.3%. This time around, options traders are pricing in a bigger move of 7.6%.

And it would seem that the expectation from speculators is that this move will be to the upside, since call buying has been unusually popular in recent weeks at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). The 10-day call/put volume ratio at the these exchanges is 11.67, ranking in the 92nd annual percentile. However, this could be connected to the high short interest levels on EAT stock, as there are 13.5 million shares dedicated to short interest -- so some of these bears could be using long calls to hedge.

Either way, Brinker shares will need to overcome recent pressure from the 80-day moving average in able to hit Evercore's price target. Most other analysts have taken a more skeptical approach, with just 25% of covering firms recommending to buy the shares. EAT was last seen trading at $40.03.

a schaeffer's exclusive


We're celebrating 38 years with this FREE insider report!



NEW! Explore Schaeffer’s Partners' deals and get connected to top online brokerages with deals tailored exclusively for our readers.  Get answers to your questions regarding transfer fees, commission rates, programs and available discounts related to online trading services.

MORE | MARKETstories

What's Next for the American Wealth Gap
Porter Stansberry is predicting a major change in the American economic system.
Bull Notes For Aramark Stock After Activist Investor Stake
Aramark is one of the best stocks on the NYSE today
Big Sale Boosts TLRD Stock
The company is selling its corporate apparel business for $62 million
IRA/401K Investment Guide: 2019 Stock Market Crash
Use gold to protect any IRA, 401(k), or retirement account from a looming financial crisis.