Wells Fargo Q2 Review on Texas Roadhouse (TXRH); Beef Prices Down, But A Red Herring
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Price: $24.20 +0.62%
Rating Summary:
2 Buy, 11 Hold, 0 Sell
Rating Trend:
Down
Today's Overall Ratings:
Up: 11 | Down: 35 | New: 23
Rating Summary:
2 Buy, 11 Hold, 0 Sell
Rating Trend:
Down
Today's Overall Ratings:
Up: 11 | Down: 35 | New: 23
Trade TXRH Now!
Wells Fargo maintains a 'Market Perform' on Texas Roadhouse (NASDAQ: TXRH) price target range $18-$20.
Wells analyst, said, "A nice beat and raise quarter, but with traffic and same-store sales (SSS) decelerating and continued mid-single-digit commodity inflation into 2013 an increasing likelihood, we remain on the sidelines...Our 2012 EPS estimate moves to $1.02 from $0.97 to reflect the Q2 EPS upside and 2013E moves to $1.12 from $1.10."
"Beef prices are down 15% over the last four weeks, but a red herring as it relates to inflation in 2013. Extreme drought conditions and a 50%+ jump in the price of corn over the last month has resulted in a jump in the number of cattle heading to processing plants, which in turn has resulted in a temporary surplus of beef. With cattle processing pulled forward into 2012, once the market adjusts to the temporary influx of supply, most expect beef prices to head higher in 2013. Looking forward to 2013 there are a lot of unanswered questions, but we believe it will be a significant challenge to hold COGS flattish as a percentage of revenue, even with 2%+ menu pricing."
For an analyst ratings summary and ratings history on Texas Roadhouse click here. For more ratings news on Texas Roadhouse click here.
Shares of Texas Roadhouse closed at $17.95 yesterday, with a 52 week range of $12.21-$19.35.
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Wells analyst, said, "A nice beat and raise quarter, but with traffic and same-store sales (SSS) decelerating and continued mid-single-digit commodity inflation into 2013 an increasing likelihood, we remain on the sidelines...Our 2012 EPS estimate moves to $1.02 from $0.97 to reflect the Q2 EPS upside and 2013E moves to $1.12 from $1.10."
"Beef prices are down 15% over the last four weeks, but a red herring as it relates to inflation in 2013. Extreme drought conditions and a 50%+ jump in the price of corn over the last month has resulted in a jump in the number of cattle heading to processing plants, which in turn has resulted in a temporary surplus of beef. With cattle processing pulled forward into 2012, once the market adjusts to the temporary influx of supply, most expect beef prices to head higher in 2013. Looking forward to 2013 there are a lot of unanswered questions, but we believe it will be a significant challenge to hold COGS flattish as a percentage of revenue, even with 2%+ menu pricing."
For an analyst ratings summary and ratings history on Texas Roadhouse click here. For more ratings news on Texas Roadhouse click here.
Shares of Texas Roadhouse closed at $17.95 yesterday, with a 52 week range of $12.21-$19.35.
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