Last night EAT announces that the company expects fiscal 2009 earnings per diluted share, before special items and excluding the results of Macaroni Grill, to decline between 15 -25%.
I now get EAT’s NTM EBITDA around $380 million. Using last night close of $13, that implies EAT EV/EBITDA at 5.7x. Normally, I could argue that the stock reflects the negative pre-announcement. I can’t say that today.
If the market takes EAT’s valuation down by 1 multiple point that would equals a decline of $3.75 or 25%. Unfortunately, that seems about right!