Update shared on09 Oct 2025
Fair value Decreased 1.23%Texas Roadhouse's average analyst price target has been revised slightly downward to approximately $196.71 from $199.17. Analysts point to resilient traffic but note ongoing concerns about profit margins and cost management.
Analyst Commentary
Recent updates from Wall Street have provided a nuanced outlook on Texas Roadhouse, reflecting both optimism about the company’s near-term prospects and reservations about longer-term challenges. The latest price target adjustments highlight a mix of encouraging signals and points of caution as the company gears up for its Q2 report.
Bullish Takeaways
- Bullish analysts have raised price targets, citing improved industry demand and expectations for a better performance compared to the previous quarter.
- Solid traffic trends and sustained patronage from middle and upper income customer cohorts are noted as supporting same-store sales growth.
- Cost pressures appear manageable at present, supporting margin stability and enabling competitive pricing.
- Select analysts believe Texas Roadhouse's brand relevance and disciplined growth strategy position it well for continued market share gains.
Bearish Takeaways
- Bears caution that profits remain under scrutiny, particularly due to the company's historical reluctance to pass higher beef costs on to consumers.
- Ongoing "policy noise" and macroeconomic risks could challenge growth and add volatility to near-term earnings forecasts.
- Intensified competition within the restaurant industry, including from grocers and convenience stores, raises concerns over Texas Roadhouse's ability to defend traffic share.
- Some analysts remain neutral or cautious, highlighting that while traffic is resilient, consistent margin improvement and cost discipline will be key to justifying elevated valuations.
What's in the News
- Texas Roadhouse reiterated its 2025 earnings expectations and is forecasting positive comparable restaurant sales growth. This outlook is supported in part by planned menu price increases and a store week growth rate of around 5% (Company Guidance).
- Between April and July 2025, the company completed the repurchase of 175,983 shares, totaling $30 million, under its latest buyback program (Buyback Tranche Update).
Valuation Changes
- Consensus Analyst Price Target has declined slightly from $199.17 to $196.71.
- Discount Rate has edged lower from 8.59% to 8.51%.
- Revenue Growth forecasts have eased modestly from 9.10% to 8.91%.
- Net Profit Margin projections have improved from 8.07% to 8.34%.
- Future P/E ratio has decreased from 27.90x to 26.74x, indicating a lower valuation multiple.
Disclaimer
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