Stifel analyst Chris O’Cull downgraded Texas Roadhouse to Hold from Buy with a price target of $105, down from $110. The analyst remains confident in the company’s 2023 sales outlook and long-term unit growth prospects. However, the firm is less confident there is meaningful upside to its 2023 earnings per share estimate of $4.55. Based on Texas Roadhouse’s comments, it seems unlikely that better than expected comp sales and the corresponding leverage will offset wage and commodity inflation without more aggressive menu pricing, Stifel contends. It views the stock’s risk/reward as balanced at the current levels.
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