Texas Roadhouse (NASDAQ: TXRH) has been downgraded by Wall Street Zen from a “hold” rating to a “sell” rating, according to a research note released on Saturday. This decision reflects growing concerns among analysts regarding the restaurant chain’s stock performance. Other research institutions have also revised their evaluations.
On November 7, Truist Financial decreased its target price for Texas Roadhouse from $210.00 to $195.00 while maintaining a “buy” rating. Similarly, Stephens lowered their target price from $175.00 to $168.00, classifying the stock as “equal weight.” Royal Bank of Canada followed suit, reducing its price target from $185.00 to $175.00 and assigning a “sector perform” rating. In contrast, UBS Group reaffirmed a “buy” rating on November 10, indicating some confidence in the company’s potential.
The Goldman Sachs Group also made a significant adjustment on October 1, cutting its price objective from $200.00 to $180.00 and assigning a “neutral” rating. Currently, two analysts have given the stock a “Strong Buy” rating, eleven have labeled it as a “Buy,” nine have rated it as “Hold,” and one has issued a “Sell” rating. According to MarketBeat data, Texas Roadhouse holds an average rating of “Moderate Buy” with a consensus price target of $194.26.
Recent Earnings Report
Texas Roadhouse recently announced its quarterly earnings on November 6. The company reported earnings per share (EPS) of $1.25, falling short of the consensus estimate of $1.28 by $0.03. The restaurant operator recorded a net margin of 7.49% and a return on equity of 30.59%. Revenue for the quarter reached $1.44 billion, which was slightly above analyst expectations of $1.43 billion. This represents a year-over-year revenue increase of 12.8%. Analysts predict that Texas Roadhouse will achieve an EPS of 7.23 for the current fiscal year.
Insider Transactions and Institutional Investments
In related news, Director Gregory N. Moore sold 1,400 shares of Texas Roadhouse stock on December 3 at an average price of $170.00, totaling approximately $238,000. After this transaction, Moore retains ownership of 32,150 shares, valued at around $5,465,500, reflecting a 4.17% decrease in his position. Another director, Hugh J. Carroll, sold 1,000 shares on December 4 for an average price of $167.27, amounting to $167,270. Following this sale, Carroll owns 1,854 shares valued at about $310,118.58, a decrease of 35.04% in his holding.
Currently, corporate insiders own approximately 0.50% of Texas Roadhouse stock, while institutional investors hold a significant 94.82% of the shares. Recent activities by institutional investors include Caldwell Trust Co’s acquisition of a new position valued at $28,000 during the second quarter and Measured Wealth Private Client Group’s investment of about $33,000 in the third quarter. Root Financial Partners LLC and Ameritas Advisory Services LLC also made new stakes in the company, with investments of approximately $36,000 and $53,000, respectively. Salomon & Ludwin LLC increased its holdings by 37.2%, now owning 299 shares valued at $50,000.
Texas Roadhouse, established in 1993 by founder Kent Taylor, is known for its casual dining experience featuring hand-cut steaks, ribs, and a variety of house specialties. The company emphasizes a vibrant dining atmosphere and community-oriented service, aiming to provide customers with high-quality meals in a welcoming environment.
