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Grocery food prices continue to rise, and this represents a potentially overlooked opportunity for restaurants like Texas Roadhouse Inc (NASDAQ:TXRH).
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Wedbush analyst Nick Setyan maintained an Outperform on Texas Roadhouse with an unchanged $73 price target.
Raymond James analyst Brian Vaccaro maintained a Strong Buy with a price target lifted from $52 to $56.
Wedbush: Texas Roadhouse An 'Outsized Beneficiary' From Trend
Texas Roadhouse is viewed as a chain that offers good value to consumers, so its value gap versus grocery store protein should result in "steady, if not increasing" off-premise sales, Setyan said in a Wednesday note.
Most notably, management decided to sell uncooked cuts of steaks, and this decision "makes even more sense" given a shrinking price gap versus grocery store steaks, the analyst said.
In terms of quick-service-restaurants, Jack in the Box Inc. (NASDAQ:JACK) had already established for itself a premium reputation within the burger category, he said.
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The company chose to ignore the value wars of recent years, which implies it could "hold its own" if the food away from home tailwind starts to decline, according to Wedbush.
Raymond James On Improving Texas Roadhouse Sales Data
Most full-service restaurants that already reopened their dining halls at limited capacity are now seeing sequential comp increases in the 15% to 25% range, Vaccaro said in a Wednesday note. In fact, restaurants that reopened their doors are outperforming those that chose otherwise by 8% to 15%, the analyst said.
Investors looking to take advantage of improving weekly sales data as more states reopen should consider Texas Roadhouse, a best-in-class operator that boasts a strong balance sheet, he said.
Olive Garden's parent company Darden Restaurants, Inc. (NYSE:DRI) is also a Strong Buy at Raymond James, while Bloomin' Brands Inc (NASDAQ:BLMN), Chuy's Holdings Inc (NASDAQ:CHUY) and Brinker International, Inc. (NYSE:EAT) are all-Outperform rated.
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Photo by Dwight Burdette via Wikimedia.
Crypto Whales Are Loading Up — Are You?
New research shows the biggest crypto buyers are back. And this time? They could hold for the possibility that Bitcoin will surpass $100,000 in 2024. You don’t want to miss the next massive crypto bull run like we saw in 2020 and 2021. To know exactly what’s going on and what to buy… Get Access To Benzinga’s Best Crypto Research and Investments For Only $1.