Restaurant Stock With Clear Path to Previous Records

An unwinding of this pessimism could fuel additional tailwinds for EAT

Jun 6, 2025 at 3:50 PM

Subscribers to Schaeffer's Weekend Trader options recommendation service received this EAT commentary on Sunday night, along with a detailed options trade recommendation -- including complete entry and exit parameters. Learn more about why Weekend Trader is one of our most popular options trading services.

Restaurant stock Brinker International Inc (NYSE:EAT) is breaking out above the $165-$168 area, which represents multiple highs since mid-February. There is also a clear path to its Feb. 4, all-time high of $192.22, making now an excellent time to buy EAT calls.

Longer term, the equity is staging a sharp bounce off its 10-month moving average. Plus, there is peak put open interest (OI) at the 170-strike, and its Schaeffer's put/call open interest ratio (SOIR) of 2.40 ranks in the 98th percentile of annual readings. An unwinding of this pessimism could fuel additional tailwinds.

Analysts lean bearish toward EAT, despite its 31.4% year-to-date gain and 148.9% lead over the last 12 months. In fact, 14 of the 18 firms in coverage carry a tepid “hold” or worse rating, indicating there’s ample room for upgrades. Brinker International stock also looks ripe for a short squeeze, with 11.9% of its available float sold short, and many of these shorts now underwater.

Our recommended call option has a leverage ratio of 7.4 and will double on a 14.4% gain in the underlying security.

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