Brinker International (EAT) could keep growing sales and market share as Chili's benefits from value deals, better operations, unit growth, and stock buybacks, while margin pressure near-term may ease over time, UBS said in a note Friday.

Chili's is expected to post solid fiscal Q3 same store sales despite poor weather, and Brinker's current strategy and leadership should help support steady growth, UBS said.

The investment firm said the new chicken sandwich platform, the "3 For Me" offer, stronger marketing, and better customer experience should keep traffic and spending trends healthy, as its recent survey showed strong consumer demand for Chili's, helped by good value, better service, and improved menu items.

The firm said it expects some near-term pressure on restaurant margins from inflation, marketing spending, winter storms, and labor costs; however, profit margins should improve over the longer term as cost pressure eases and sales growth and pricing continue to help results.

UBS kept its buy rating and $190 price target, saying Brinker shares still have room to rise, citing solid earnings potential, faster unit growth, a strong balance sheet, and buybacks.

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