KeyBanc Downgrades Texas Roadhouse (TXRH) to Hold

KeyBanc downgraded Texas Roadhouse (NASDAQ: TXRH) from Buy to Hold and removed its price target (prior $30.00).

Analyst Christopher O'Cull said, "We continue to view Texas Roadhouse, Inc. (TXRH NASDAQ) operating fundamentals positively, but see limited EPS upside for 2014 and 2015. We are concerned Street estimates for 2014 ($1.26 vs. KBCM $1.23) and 2015 ($1.46 vs. KBCM $1.42) do not reflect the likelihood inflation will remain an issue for several months. We believe 3Q SRS were up roughly 4% (MBGR note published September 25), driven primarily by traffic, which speaks to the health of the brand. Unfortunately, traffic gains do not carry as much flow-through as price increases, so we do not expect the strong comps to offset the commodity pressure. We would consider being more constructive toward shares on a pullback, especially if consensus estimates were reset to levels closer to our projections. TXRH is trading at 9.4x NTM EV/EBITDA, 21x NTM P/E, and 1.2x EV/Sales."

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 $27.33 yesterday.

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