Texas Roadhouse (NASDAQ: TXRH) has been downgraded from a “hold” rating to a “sell” rating by analysts at Wall Street Zen, as indicated in a research note released on November 4, 2023. This shift reflects growing concerns among equities researchers regarding the restaurant chain’s future performance.
Several other financial institutions have also reassessed their positions on Texas Roadhouse. On November 3, Truist Financial lowered its target price for the stock from $210.00 to $195.00 while maintaining a “buy” rating. Similarly, Stephens reduced its target price from $175.00 to $168.00 and assigned an “equal weight” rating. Royal Bank of Canada adjusted its price target down from $185.00 to $175.00, issuing a “sector perform” rating. In contrast, UBS Group reaffirmed a “buy” rating on November 6, 2023. The Goldman Sachs Group also revised its price objective downward from $200.00 to $180.00, designating a “neutral” rating for the stock.
The consensus among analysts currently reflects a mixed outlook: two rate the stock as a Strong Buy, eleven as Buy, nine as Hold, and one as Sell. According to MarketBeat data, Texas Roadhouse has an average rating of “Moderate Buy” with a consensus price target of $194.26.
Recent Earnings Performance
Texas Roadhouse recently reported its quarterly earnings on November 6, 2023. The company posted earnings per share (EPS) of $1.25, falling short of the expected $1.28 by $0.03. The restaurant chain achieved a net margin of 7.49% and a return on equity of 30.59%, with revenues reaching $1.44 billion, slightly above analyst estimates of $1.43 billion. Compared to the same quarter last year, revenue increased by 12.8%.
Looking ahead, analysts predict that Texas Roadhouse will report an EPS of $7.23 for the current fiscal year, indicating a cautious optimism despite recent downgrades.
Insider Trading Activity
Recent insider transactions have also drawn attention. On December 3, 2023, Director Gregory N. Moore sold 1,400 shares at an average price of $170.00, totaling $238,000.00. Following this sale, Moore retains 32,150 shares valued at approximately $5,465,500, resulting in a 4.17% decrease in his holdings.
Similarly, Director Hugh J. Carroll sold 1,000 shares on December 4, 2023, for a total of $167,270.00, which marked a 35.04% reduction in his stake. Currently, corporate insiders hold approximately 0.50% of the company’s stock.
Institutional Investment Trends
Interest from institutional investors has fluctuated recently, with several hedge funds adjusting their positions. Caldwell Trust Co acquired a new stake during the second quarter valued at $28,000, while Measured Wealth Private Client Group LLC invested approximately $33,000 in the third quarter. Root Financial Partners LLC also purchased a new stake worth around $36,000.
Salomon & Ludwin LLC notably increased its holdings by 37.2% in the third quarter, now holding 299 shares valued at about $50,000. Currently, hedge funds and institutional investors own approximately 94.82% of Texas Roadhouse stock.
About Texas Roadhouse
Founded in 1993 by Kent Taylor, Texas Roadhouse, Inc. operates a chain of casual dining restaurants known for their hand-cut steaks, ribs, chicken, seafood, and house specialties. The restaurants feature a Western-themed decor and emphasize a lively dining atmosphere focused on hospitality and value.
As the market continues to react to these developments, stakeholders will be closely monitoring Texas Roadhouse’s strategic responses to the changing financial landscape.
