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In a report published Tuesday, Wunderlich Securities analyst Robert M. Derrington reiterated a Hold rating on
Texas RoadhouseTXRH, and raised the price target from $28.00 to $33.00.
In the report, Wunderlich Securities noted, “We recently chatted with Texas Roadhouse (TXRH) management following the company's recent Q3 (Sep) results in which revenue beat, but EPS dragged, impacted by stubborn food inflation. While consumers continue to crave its ‘Legendary Food, Legendary Service' and contributing to its better than projected top line growth, the high cost of providing that experience dragged Q3 EPS to $0.27 vs. our $0.28/Street $0.29 EPS; with food and labor pressures expected to continue through 2015, management remains resolute in tightening its non-guest-facing costs to mitigate that pressure. Despite that, with food and labor inflation likely to exceed pricing, margins and EPS remain at risk. We're keeping our Hold-rating, but lifting our PT to $33 from $28, supported by strong traffic trends.”
Texas Roadhouse closed on Monday at $31.65.
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