Texas Roadhouse (TXRH – Research Report), the Consumer Cyclical sector company, was revisited by a Wall Street analyst yesterday. Analyst Jon Tower from Citi downgraded the rating on the stock to a Hold and gave it a $164.00 price target.
Jon Tower’s rating is based on a combination of factors that highlight both strengths and challenges for Texas Roadhouse. While the company is recognized as a high-quality entity with a strong brand, recent data indicates a slowdown in customer traffic and same-store sales, which lacks immediate catalysts for improvement. This trend is compounded by competitive pressures from other brands like Chili’s and a significant exposure to Hispanic consumers, which could pose ongoing challenges.
Additionally, rising beef prices present a risk that is not sufficiently offset by current traffic or operational efficiencies. The company’s strategic shift towards expanding less-proven brands rather than its core concept may also temper long-term investor support. These factors collectively contribute to the Hold rating, as they suggest potential headwinds that could impact Texas Roadhouse’s financial performance in the near term.
In another report released yesterday, Barclays also maintained a Hold rating on the stock with a $179.00 price target.