Texas Roadhouse (TXRH) PT Raised to $190 at Evercore ISI

Evercore ISI analyst David Palmer raised the price target on Texas Roadhouse (NASDAQ: TXRH) to $190.00 (from $185.00) while maintaining a Outperform rating.

The analyst comments "Our view: Texas Roadhouse has quickly returned to its old self after a weather and influenza impacted February with SSS growth of 5% through the first five weeks of 2Q (traffic +3.1%) against a difficult comparison — including a 50bp headwind from an Easter shift. Our 2025 EPS estimate of $6.53 is unchanged as higher SSS growth forecasts (now +5% in 2Q–4Q; cons. +4.5% on avg.) are slightly offset by higher wage and commodity inflation and the company’s cautious stance on pricing. Our 2025 restaurant margin forecast steps down from 16.5% to 16.2% (-90bp YoY; cons. 16.8%) as the company prices behind wage and food cost inflation. That said, traffic growth has accelerated during a period of shaky consumer confidence — all without the benefit of value promotions or advertised menu news. Maintaining our EPS while increasing our target with sales strength and over $1 of “under-earning.” We are slightly raising our price target from $185 to $190 due to a combination of renewed solid traffic growth and clear “under-earning.” The company is currently running price of slightly over 2% against wage and food input growth of 4%+. Our 2026e EPS of $7.38 (+13% YoY; cons. $7.66) assumes the beef cycle may sustain pressure on food costs through 2026 — keeping restaurant margin at 16.2% versus the long-term target of 17%-18%. Our new higher target multiple of 26x (2026e EPS) is toward the higher end of the 21x-27x range and partially reflects under-earning. A 17.5% margin (within the long-term target restaurant margin range) in 2026 would imply $8.60 in EPS — 16% above our current estimate."

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