Merida, Mexico, Paseo Montejo Avenida Colon, Chili’s restaurant, shrimp Caesar salad with menu (Jeffrey Greenberg/Getty Images)

Brinker feels god in this Chili’s tonight; restaurant owner soars on huge sales growth

Luke Kawa

10/30/24 9:22AM

Shares of Brinker International are spiking after the owner of Chili’s and Maggiano’s Little Italy posted much larger profits than Wall Street expected and said that trend was poised to continue.

Earnings per share of $0.95 were about 40% above the consensus estimate for its fiscal Q1 2025, and management boosted their guidance for full-year sales and profits. The stock is up nearly 8% in the premarket.

While most of the industry — particularly the quick-service restaurant space — continues to be obsessed with providing value to price-conscious consumers, Brinker doesn’t seem to have the same problem at the chain that accounts for 90% of its revenues.

Management credited both higher traffic and higher prices for driving robust same-store sales growth of 14.1% year on year at company-owned Chili’s locations.

Brinker International Q1 2025 results — Source: Brinker International

“Great food with great service at industry-leading value is driving strong Chili’s sales and traffic,” President and CEO Kevin Hochman said.

This marks Brinker as a winner in a slowing market: after booming from 2021 through 2023, the annual growth in US spending at “food dining and drinking places” has decelerated to well below its prepandemic rate.

J. Edward Moreno34m

Novo says FDA has approved high-dose Wegovy shot

The Food and Drug Administration approved Novo Nordisk’s high-dose Wegovy shot, the company announced on Thursday.

Wegovy HD, a once-weekly 7.2-milligram injection, helped patients lose 20.7% of their body weight after 72 weeks, putting it in line with Eli Lilly’s competitor drug, Zepbound. By comparison, Wegovy typically has a maximum dose of 2.4 milligrams, which resulted in 15% weight reduction over 68 weeks in trials.

Wegovy HD was the first drug to be approved through the FDA’s new priority voucher system. This comes as Novo, despite being early to the GLP-1 boom, has been outpaced in sales by Lilly. The company released a pill version of Wegovy in January, which has shown strong early uptake, though new competitor products are set to debut this year and next.

The stock is down about 1.6% for the day, but was down nearly 3% before the announcement.

Tasha Matsumoto

Crudely speaking

40m

What we talk about when we talk about crude oil

While both WTI and Brent are light and sweet crude, differences in geography and chemical composition influence the Brent-WTI spread.

ODESSA, TEXAS - APRIL 27: Pump jacks working on the Permian Basin near Odessa

Matt Phillips2h

Intuit, Workday jump amid Iran war fueling flight-to-software trade

Cash flow positive software companies — the same ones that were seen as doomed to obsolescence by AI a few weeks back — jumped Thursday, with Oracle, Workday, Intuit, and Salesforce staying above water despite the general downtrend in the big indexes.

Some of the uptick is likely linked to the better-than-expected weekly jobless claims numbers that came in early today, which eased concerns about a recession brought on by the most recent monthly employment report. (Payroll-processing stocks like Paycom Software, Paychex, and Automatic Data Processing are clearly breathing a sign of relief.)

And given that these software companies often have a “seat-based” revenue model, the fact that human butts are not rapidly being replaced by AI-enhanced robot keisters gives them a lift as well.

Also as we’ve said before, amid the chaos and uncertainty of the Iran war, the steady cash flows and predictable short-term outlook of software-as-a-service stocks have a definite appeal.

Even if you think that over the long term AI will end up slaughtering these cash cows, that’s a problem for a day perhaps three to five years in the future, whereas the Iran war is a growing risk investors increasingly can’t ignore today.

Matt Phillips3h

Rocket Lab slips with other momentum stocks despite DOD hypersonic test deal, new analyst “buy” call

Rocket Lab slipped early Thursday along with other momentum stocks, despite announcing a new $190 million deal for 20 tests of hypersonic rockets for the Department of Defense and picking up a new bullish analyst call.

The commercial space launch company called the deal to launch 20 hypersonic test flights over a four-year period in collaboration with Kratos Defense its “single largest launch agreement yet.”

Separately, analysts at brokerage firm Clear Street initiated coverage of Rocket Lab with a “buy” rating and an $88 price target — essentially the same as Wall Street’s $88.38 consensus, according to FactSet. That implies upside of about 27% for the stock compared to yesterday’s close. Clear Street analysts wrote:

“Despite shares rising 289% (vs. 26% for the NASDAQ) over the past year, we see further upside. Our $88 target is based on 20x 2030E EV/Sales, in line with the ~30x NTM EV/Revenue average over the past year when discounted to present value. We anchor on 2030E to capture the payoff from ~16 annual Neutron launches following a multi-year investment cycle. Our outlook incorporates estimated dilution and proceeds from the $1B equity distribution agreement announced on 3/17/2026.”

The favorable headlines for Rocket Lab weren’t enough to help the shares overcome a general downdraft for high-beta momentum stocks such as itself. They are getting hammered early on the deteriorating situation in the Mideast war.

Rocket Lab wins $190 million Pentagon deal for hypersonic test flights

“Despite shares rising 289% (vs. 26% for the NASDAQ) over the past year, we see further upside. Our $88 target is based on 20x 2030E EV/Sales, in line with the ~30x NTM EV/Revenue average over the past year when discounted to present value. We anchor on 2030E to capture the payoff from ~16 annual Neutron launches following a multi-year investment cycle. Our outlook incorporates estimated dilution and proceeds from the $1B equity distribution agreement announced on 3/17/2026.”

Max Knoblauch5h

Uber will invest $1.25 billion in Rivian in a new robotaxi deal

EV maker Rivian surged more than 9% in premarket trading on Thursday following an announcement that Uber will invest up to $1.25 billion in the company through 2031 as part of a robotaxi partnership.

The deal will begin with an initial $300 million investment, and Uber will purchase 10,000 autonomous versions of the R2. Uber will have the option to buy 40,000 more in 2030.

The R2 is Rivian’s smaller, less expensive model and is set to roll out to buyers in the second quarter of this year.

Per a company filing on Thursday, Rivian “no longer expects to be adjusted EBITDA positive in 2027 due to an expected increase in R&D spend associated with the acceleration of its autonomy roadmap.”

Uber, which has more than 20 autuonomous vehicle partnerships ranging from Alphabet’s Waymo to Baidu, has become a dominant robotaxi force.

Rivian had first hinted at robotaxi plans at its Autonomy and AI Day in December.

Uber to invest up to $1.25 billion in EV maker Rivian in deal to launch 50,000 robotaxis