UBS Reiterates Buy Rating on Texas Roadhouse (TXRH)

UBS analyst Dennis Geiger reiterated a Buy rating and $220.00 price target on Texas Roadhouse (NASDAQ: TXRH).

The analyst commented, "For 2Q earnings (8/7), we expect TXRH maintained strong sss momentum through the quarter, with potential upside to Consensus, while we model a margin miss on our COGS forecast. While cost inflation may constrain EPS upside potential near-term, we continue to believe impressive and resilient demand and an eventual improvement re-expansion in margins represent a still compelling long-term investment opportunity. Our discussions suggest two sets of investor expectations for 2Q sss, with many indicating ~5.5-6% (while others are in the ~6-7% range), and investors expecting similar sss momentum 3QTD. Investors are generally expecting a commodity cost inflation outlook increase to ~4-5% (from ~4% or a ~3.5-4.5% range). TXRH appears positioned for continued sss momentum in 2H, which we expect will be supportive for shares, with 3QTD comp trends likely the key metric of focus for earnings results. We continue to like TXRH shares given leading traffic momentum, a strong store growth outlook, and likely still achievable LT 17-18% margins over time."

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 $182.97 yesterday.

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