As of June 7, 2025, Brinker International Inc's estimated intrinsic value ranges from $108.08 to $497.16 per share, depending on the valuation methodology applied.
| Valuation Method | Fair Value (USD) | Implied Upside/Downside |
|---|---|---|
| Discounted Cash Flow (10Y) | $497.16 | +189.6% |
| Discounted Cash Flow (5Y) | $365.38 | +112.9% |
| Dividend Discount Model (Multi-Stage) | $254.26 | +48.1% |
| Dividend Discount Model (Stable) | $288.50 | +68.1% |
| Earnings Power Value | $108.08 | -37.0% |
Is Brinker International Inc (EAT) undervalued or overvalued?
With the current market price at $171.65, the stock appears to be significantly undervalued.
Intrinsic value represents the "true" worth of a company based on its fundamentals rather than market sentiment. We've employed multiple methodologies to triangulate Brinker International Inc's intrinsic value, including:
The cost of capital is a critical factor in valuation models, representing the required return for investors.
| WACC Component | Low | High |
|---|---|---|
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 0.44 | 0.67 |
| Cost of equity | 5.9% | 8.6% |
| Cost of debt | 4.7% | 4.8% |
| Tax rate | 7.9% | 10.8% |
| Debt/Equity ratio | 0.1 | 0.1 |
| After-tax WACC | 5.7% | 8.2% |
Our DCF model projects cash flows over 5-year and 10-year horizons, with the following key assumptions:
| DCF Model | Fair Value | Enterprise Value | % from Terminal Value |
|---|---|---|---|
| 5-Year Growth | $365 | $16,766M | 87.5% |
| 10-Year Growth | $497 | $22,624M | 76.7% |
| 5-Year EBITDA | $162 | $7,729M | 73.0% |
| 10-Year EBITDA | $253 | $11,753M | 55.2% |
The DDM values a company based on its expected future dividend payments. We used two approaches:
EPV assesses a company's value based on its current normalized earnings power, assuming no growth.
| EPV Component | Value |
|---|---|
| Normalized Earnings | $360M |
| Discount Rate (WACC) | 8.2% - 5.7% |
| Enterprise Value | $4,378M - $6,280M |
| Net Debt | $525M |
| Equity Value | $3,854M - $5,755M |
| Outstanding Shares | 44M |
| Fair Value | $87 - $129 |
| Selected Fair Value | $108.08 |
| Metric | Value |
|---|---|
| Market Capitalization | $7630M |
| Enterprise Value | $8155M |
| Trailing P/E | 22.91 |
| Forward P/E | 29.19 |
| Trailing EV/EBITDA | 7.85 |
| Current Dividend Yield | 0.00% |
| Dividend Growth Rate (5Y) | -75.70% |
| Debt-to-Equity Ratio | 0.10 |
To determine the most reliable intrinsic value estimate, we weigh each valuation method based on:
| Valuation Method | Weight | Weighted Value |
|---|---|---|
| Discounted Cash Flow (10Y) | 30% | $149.15 |
| Discounted Cash Flow (5Y) | 25% | $91.34 |
| Dividend Discount Model (Multi-Stage) | 20% | $50.85 |
| Dividend Discount Model (Stable) | 15% | $43.28 |
| Earnings Power Value | 10% | $10.81 |
| Weighted Average | 100% | $345.43 |
Based on our comprehensive valuation analysis, Brinker International Inc's weighted average intrinsic value is $345.43, which is approximately 101.2% above the current market price of $171.65.
Key investment considerations:
Given these factors, we believe Brinker International Inc is currently significantly undervalued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.