Brinker International, Inc. (EAT) Stock Moves Down and Here’s Why

Brinker International, Inc. (NYSE: EAT) shares fell on Wednesday Jan 4 with lower trade volume than normal after a number of analysts weighed in on the investing value of the stock with a downgraded rating.

Meanwhile, U.S. stocks opened higher on Wednesday as banking stocks led the Dow Jones Industrial Average closer to the 20,000 milestone.

The Dow DJIA, +0.18% gained 25 points, or 0.1%, to 19,906. The S&P 500 SPX, +0.36% climbed four points, or 0.2%, to 2,262. The Nasdaq Composite Index COMP, +0.50% added 13 points, or 0.3%, to 5,447.

Analysts at Telsey Advisory Group downgraded shares of Brinker International, Inc. (NYSE: EAT) from Outperform to Market Perform in a research note to investors today. With a rating of Market Perform on the stock, the company has a 52-week high of $55.84. The one-year price target of $53.20 is above the opening price of $48.57, causing a fair amount of other analysts to issue statements on the stock recently. Important and fundamental changes in the company’s procedures, future vision or industry can cause downgrades as the analysts feel that the future prospects for the security have weakened from the original recommendation.

Shares of Brinker International, Inc. (NYSE: EAT) opened at $48.57 on Tuesday and has traded in a range between, $47.91 and $49.05, and last traded at $48.40, a drop of $0.77 per share or -0.02 over the previous closing price.

Brinker International, Inc. (NYSE: EAT) now has a market cap of 2.40B.

Brinker International, Inc. (NYSE: EAT) Average Daily Trading Volume

287,816 shares traded hands yesterday, lower than normal, out of a total float 49,122,000. lower than normal. Look for trading volume to pick up in the coming days as momentum traders often use swings in trading volume to identify heavy volume accumulation or distribution by institutional investors.

While increased trading for one day will not mean much, conversely, a trend of heavy trading volume on the buy side over a period of days or weeks sends a positive signal to market traders that institutions may be moving in, so institutional sponsorship is very important.

Institutional sponsorship simply refers to ownership of a stock by mutual funds, banks, pension funds and other large institutions.

Professional investors such as these retain substantial teams of analysts that research thousands of stocks, so it is good corroboration to see them buying a stock you are researching.

Brinker International, Inc. (NYSE: EAT) Moving Averages

A moving average can also act as support or resistance. In an uptrend a 50-day, 100-day or 200-day moving average may act as a support level, as shown in the figure below.

This is because the average acts like a floor (support), so the price bounces up off of it.

In a downtrend a moving average may act as resistance; like a ceiling, the price hits it and then starts to drop again.

By tracking the activity of these professional investors—and the moving averages they affect—it allows for traders to make more effective decisions on trades.

Trades for Brinker International, Inc. (NYSE: EAT) have ranged from $43.30 – 55.84, and the stock now has a 50-day MA of $52.53 and 200-day MA of $50.52. Today’s last price is 0.13% lower than the 52 week high of $55.84.

Indeed, earnings growth is among the most critical things to look at in regards to stock investing and, accordingly, investors identify companies that have increased their earnings by at least 25% over a 3 year period.

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