Royal Bank Of Canada Issues Pessimistic Forecast for Texas Roadhouse (NASDAQ:TXRH) Stock Price

Key Points

• Royal Bank of Canada cut its Texas Roadhouse price target to $215 from $220 but maintained an Outperform rating, implying 16.09% upside from the prior close.
• Third-quarter earnings fell short of forecasts: EPS was $1.36 versus $1.46 expected, and revenue was $1.57 billion versus $1.58 billion. Revenue nevertheless grew 9.5% year over year.
• Analyst views remain broadly positive but mixed: MarketBeat reported a Moderate Buy consensus and an average price target of $207.78, while Barclays downgraded the stock to Cautious.

Texas Roadhouse (NASDAQ:TXRH - Get Free Report) had its price objective decreased by Royal Bank Of Canada from $220.00 to $215.00 in a report released on Friday, Benzinga reports. The firm presently has an "outperform" rating on the restaurant operator's stock. Royal Bank Of Canada's price target would indicate a potential upside of 16.09% from the company's previous close.

Other equities analysts also recently issued reports about the stock. Barclays downgraded shares of Texas Roadhouse from an "equal weight" rating to a "cautious" rating in a research note on Wednesday, October 14th. Morgan Stanley lifted their price objective on shares of Texas Roadhouse from $212.00 to $221.00 and gave the stock an "overweight" rating in a research note on Thursday, October 15th. Seaport Research Partners assumed coverage on shares of Texas Roadhouse in a research note on Wednesday, September 16th. They issued a "buy" rating and a $195.00 price objective for the company. Jefferies Financial Group raised shares of Texas Roadhouse from a "hold" rating to a "buy" rating and raised their target price for the stock from $186.00 to $190.00 in a report on Wednesday, October 14th. Finally, BTIG Research reiterated a "buy" rating on shares of Texas Roadhouse in a research report on Friday. Two investment analysts have rated the stock with a Strong Buy rating, fourteen have given a Buy rating, nine have given a Hold rating and one has given a Sell rating to the company's stock. According to MarketBeat.com, the company currently has a consensus rating of "Moderate Buy" and a consensus price target of $207.78.

Texas Roadhouse Stock Performance

NASDAQ:TXRH traded down $6.58 during mid-day trading on Friday, hitting $185.21. 914,717 shares of the stock were exchanged, compared to its average volume of 1,086,894. The stock has a market capitalization of $12.16 billion, a price-to-earnings ratio of 29.69, a price-to-earnings-growth ratio of 2.13 and a beta of 0.81. The firm's 50-day simple moving average is $173.05 and its 200 day simple moving average is $179.11. The company has a debt-to-equity ratio of 0.03, a quick ratio of 0.39 and a current ratio of 0.46. Texas Roadhouse has a fifty-two week low of $153.82 and a fifty-two week high of $216.30.

Texas Roadhouse (NASDAQ:TXRH - Get Free Report) last issued its quarterly earnings data on Thursday, November 5th. The restaurant operator reported $1.36 EPS for the quarter, missing analysts' consensus estimates of $1.46 by ($0.10). The firm had revenue of $1.57 billion during the quarter, compared to analyst estimates of $1.58 billion. Texas Roadhouse had a net margin of 6.63% and a return on equity of 27.20%. The business's quarterly revenue was up 9.5% compared to the same quarter last year. During the same period in the prior year, the company earned $1.25 earnings per share. As a group, equities analysts anticipate that Texas Roadhouse will post 6.48 EPS for the current fiscal year.

Insider Buying and Selling

In other news, Director Donna Epps sold 820 shares of the company's stock in a transaction that occurred on Monday, August 17th. The shares were sold at an average price of $206.56, for a total transaction of $169,379.20. Following the completion of the sale, the director owned 4,042 shares of the company's stock, valued at approximately $834,915.52. This represents a 16.87% decrease in their position. The sale was disclosed in a legal filing with the SEC, which is accessible through this hyperlink. Also, Director Hugh Carroll sold 650 shares of the stock in a transaction that occurred on Tuesday, August 25th. The stock was sold at an average price of $203.99, for a total transaction of $132,593.50. Following the sale, the director owned 2,883 shares in the company, valued at $588,103.17. This represents a 18.40% decrease in their position. The disclosure for this sale is available in the SEC filing. In the last ninety days, insiders sold 19,970 shares of company stock worth $4,061,808. 0.50% of the stock is owned by company insiders.

Hedge Funds Weigh In On Texas Roadhouse

A number of institutional investors have recently modified their holdings of the business. BlackRock Inc. bought a new position in Texas Roadhouse during the second quarter worth $1,273,173,000. Wellington Management Group LLP lifted its holdings in Texas Roadhouse by 8.4% in the second quarter. Wellington Management Group LLP now owns 1,541,791 shares of the restaurant operator's stock valued at $297,920,000 after buying an additional 119,803 shares during the period. Dimensional Fund Advisors LP boosted its position in Texas Roadhouse by 4.1% during the first quarter. Dimensional Fund Advisors LP now owns 864,006 shares of the restaurant operator's stock valued at $142,670,000 after acquiring an additional 34,385 shares during the last quarter. Bessemer Group Inc. boosted its position in Texas Roadhouse by 38.1% during the first quarter. Bessemer Group Inc. now owns 732,411 shares of the restaurant operator's stock valued at $120,951,000 after acquiring an additional 202,241 shares during the last quarter. Finally, Bank of America Corp DE bought a new stake in Texas Roadhouse during the second quarter valued at $113,993,000. Institutional investors and hedge funds own 94.82% of the company's stock.

Key Texas Roadhouse News

Here are the key news stories impacting Texas Roadhouse this week:

• Positive Sentiment: Bank of America raised its price target to $227 from $225 and kept a Buy rating; TD Cowen raised its target to $213 from $195 and also rated the stock Buy. Bank of America analyst update TD Cowen analyst update
• Positive Sentiment: Texas Roadhouse reported 4.3% same-store sales growth and 9.5% year-over-year revenue growth in the third quarter, to $1.57 billion. It also declared a quarterly dividend of $0.75 per share. Third-quarter takeaways Company results and dividend announcement
• Neutral Sentiment: Wells Fargo cut its target to $220 from $230 but maintained Overweight; Morgan Stanley lowered its target to $218 from $221 while retaining Buy. The target cuts temper, but do not reverse, their positive ratings. Morgan Stanley rating update
• Negative Sentiment: Third-quarter EPS of $1.36 missed analyst expectations of $1.46, while revenue of $1.57 billion was slightly below the $1.58 billion consensus. Reports also noted softer traffic, raising concerns despite comparable-sales growth. Quarterly earnings results

About Texas Roadhouse

Texas Roadhouse, Inc NASDAQ: TXRH operates full-service casual dining restaurants under the Texas Roadhouse, Bubba's 33 and Jaggers brands. Its restaurants serve made-from-scratch meals centered on hand-cut steaks, ribs, chicken, seafood, burgers and other American-style dishes, along with freshly baked rolls and a selection of beverages.

Founded in 1993, Texas Roadhouse began with its first restaurant in Clarksville, Indiana. The company's restaurant network includes company-owned and franchised locations across the United States, as well as international locations.

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