Analyst Brian Harbour of Morgan Stanley maintained a Buy rating on Texas Roadhouse (TXRH – Research Report), reducing the price target to $211.00.
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Brian Harbour’s rating is based on a combination of factors affecting Texas Roadhouse’s performance. Despite some challenges in sales early in the year, attributed to weather and other temporary factors, the company’s underlying fundamentals remain solid. Harbour expects a pickup in sales after February and foresees consistent traffic growth throughout the year. Moreover, Texas Roadhouse’s operational efficiency, aided by back-of-house technological upgrades, is anticipated to enhance the restaurant’s performance.
In addition, while there is a slight increase in commodity inflation expected for 2025, Harbour remains optimistic, particularly due to potential favorable impacts on other parts of the financials, such as general and administrative expenses and operational expenses. The company’s strong cash position and continued share repurchase program further bolster the investment thesis. Overall, Harbour maintains a positive outlook on Texas Roadhouse, viewing it as well-positioned among steakhouse competitors moving into 2025.