Texas Roadhouse Is A 'Model Of Consistency,' Analyst Says
BMO Capital Markets' Andrew Strelzik maintains an Outperform rating on Texas Roadhouse's stock with a price target boosted from $57 to $60.
Texas Roadhouse indicated that comps accelerated for the fourth consecutive quarter and reached its highest level in over two years, Strelzik said in a note. The Texas-themed steakhouse chain's comps outperformed the restaurant industry by more than 500 basis points. The company's 4.7 percent comps to date in the first quarter is also "well ahead" of the industry.
Texas Roadhouse remains "best positioned" to benefit over the next 12 months, according to Strelzik. Lower income Americans are likely to see the strongest spending increase from tax policy change and Texas Roadhouse is an ideal trade-up restaurant given its value proposition. Bar and grill concepts like Texas Roadhouse are also among the most preferred type of restaurants among consumers who seek value outside of grocery stores.
The "consistency" of Texas Roadhouse's business model and ability to deliver strong traffic growth in a difficult casual dining environment is attractive and is likely to drive its stock higher over time.
Shares of Texas Roadhouse were trading higher by 2.3 percent at $58.21.
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