As noted earlier, BMO Capital downgraded Brinker to Underperform from Market Perform. Analyst Andrew Strelzik cited valuation and the company's relatively weak margin outlook as key reasons for the downgrade. He says that most of the company's cost savings opportunities have been realized, while it will be hurt by upcoming deflation in steak, along with "limited pricing power" and "accelerating labor inflation." The analyst thinks that the company's margin outlook is worse than that of its peers, and he expects the company to miss Q2 SSS expectations and cut its fiscal 2017 comp guidance. Target to $45 from $46.

Raymond James raised the firm's price target on Brinker (EAT) to $54 from $50 and keeps a Strong Buy rating on the shares. The firm maintains a selective stance towards its restaurant coverage universe as industry sales have underwhelmed in recent months, causing Raymond James to increasingly favor stocks it view as having "idiosyncratic factors trading at attractive valuations," such as Brinker, Shake Shack (SHAK), First Watch (FWRG) and Bloomin' Brands (BLMN), the analyst tells investors in a group earnings preview note.