Benchmark maintains Hold rating on Texas Roadhouse stock

On Monday, Benchmark analyst Todd Brooks maintained a Hold rating on shares of Texas Roadhouse (NASDAQ:TXRH), a Louisville, Kentucky-based restaurant chain. The Hold rating aligns with the broader analyst consensus of 2.21 (between Buy and Hold) and price targets ranging from $139.78 to $232. According to InvestingPro data, the company currently trades at a P/E ratio of 28.79 and has achieved a perfect Piotroski Score of 9, indicating strong financial health.

Texas Roadhouse has been navigating the competitive restaurant industry, focusing on providing a unique dining experience with an emphasis on steaks and a Western-themed atmosphere. The company operates over 600 restaurants in the United States and several international locations. With revenue growth of 16% in the last twelve months and a market capitalization of $11.27 billion, it has built a strong brand presence and loyal customer base through its commitment to quality food and service. InvestingPro subscribers can access 12 additional key insights about TXRH’s financial health and growth prospects.

The decision by Benchmark to reiterate the Hold rating indicates that their analysis of Texas Roadhouse’s stock performance, market position, and growth prospects has remained consistent. The company’s strong financial position is evidenced by its 15-year track record of consistent dividend payments, with a current dividend yield of 1.61% and impressive 10.91% dividend growth in the last twelve months. While the Hold rating does not suggest immediate growth potential, it also does not signal any pressing concerns that would warrant a downgrade.

Investors typically look to ratings from research firms like Benchmark to gain insights into a stock’s future performance. A Hold rating can signify that analysts believe the stock is fairly valued at its current price, considering the company’s financial health and market conditions.

Texas Roadhouse has not released any new financial information or company updates that might have influenced Benchmark’s decision to maintain the Hold rating. The reiteration of this rating reflects a steady outlook on the company’s prospects without any significant changes that would alter the investment thesis.

In other recent news, Texas Roadhouse reported its fourth-quarter 2024 earnings, surpassing expectations with earnings per share (EPS) of $1.73 compared to the forecasted $1.64, and revenue reaching $1.44 billion, exceeding the anticipated $1.41 billion. Despite these positive results, several analyst firms have adjusted their price targets for the company. RBC Capital Markets lowered its target from $200 to $180, maintaining a Sector Perform rating, citing mixed fourth-quarter results and concerns about future demand trends and inflationary pressures. Truist Securities also reduced its price target from $209 to $205 but kept a Buy rating, acknowledging strong underlying trends despite weather-related sales impacts and commodity inflation concerns. Stifel followed suit, cutting its target from $185 to $172 while maintaining a Hold rating, noting the company’s earnings beat but highlighting a slowdown in sales momentum. Texas Roadhouse has updated its fiscal year 2025 guidance to reflect increased commodity inflation expectations, particularly for beef prices, which are anticipated to affect profit margins. Despite these challenges, the company plans to open approximately 30 new company-owned restaurants in 2025 and has announced an 11% increase in its quarterly dividend along with a new $500 million share repurchase program.

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