On Tuesday, Truist Securities updated its outlook on shares of Texas Roadhouse (NASDAQ:TXRH), raising the steakhouse chain's price target to $185 from the previous $183. This adjustment comes with a maintained Buy rating for the company's shares. The firm's analyst pointed to sales data that suggests Texas Roadhouse is performing slightly above market expectations for the second quarter of 2024.
The Truist Card Data indicates that Texas Roadhouse's estimated sales for 2Q24 are $1.59 billion, which is a modest 0.5% higher than the consensus. The company's same-store sales (SSS) growth was reported at 8.6%, closely aligning with Truist's revised estimate of a 9.5% increase, up from the initial 8.5%. Notably, Texas Roadhouse had previously disclosed an SSS growth of 9.3% during the first five weeks of the second quarter.
The analysis further reveals that sales growth accelerated by approximately 100 basis points in the subsequent eight weeks of the quarter. Despite a peak in year-over-year growth in May, June's performance remained strong, and there was a noticeable acceleration in the final week of the month.
In light of these findings, Truist Securities has also revised its earnings per share (EPS) estimate for Texas Roadhouse in the second quarter to $1.70, an increase from the former prediction of $1.67. This new estimate stands above the consensus forecast of $1.62. The updated price target and EPS estimate reflect the firm's confidence in the continued solid performance of Texas Roadhouse.
In other recent news, Texas Roadhouse has been the subject of multiple analyst upgrades and downgrades. UBS reaffirmed its Buy rating on the restaurant chain, citing the company's strong value proposition and potential for sustained sales momentum.
Similarly, Truist Securities adjusted its price target for Texas Roadhouse, reaffirming a Buy rating, while RBC Capital raised its price target but retained a Sector Perform rating. Stifel also increased its price target, maintaining a Hold rating on the stock.
These developments come on the heels of Texas Roadhouse's impressive Q1 2024 performance, with revenue exceeding $1.3 billion and a notable 8.4% increase in same-store sales. Additionally, the company announced a cash dividend of $0.61 per share, payable to shareholders of record as of June 12, 2024.
Texas Roadhouse's growth strategy includes the opening of approximately 30 new locations throughout the year. The company has already successfully opened six new stores during the second quarter, consisting of three Texas Roadhouse locations and three Bubba's 33 restaurants.
Furthermore, Texas Roadhouse is advancing its technological capabilities with initiatives such as Digital Kitchens and the upcoming Roadie-First Technology system. These recent developments reflect the company's commitment to growth and shareholder value.
InvestingPro Insights
Based on the latest data from InvestingPro, Texas Roadhouse (NASDAQ:TXRH) showcases a robust financial profile with a market capitalization of $11.46 billion and a notable revenue growth of 13.73% over the last twelve months as of Q1 2024. The company's revenue for the same period stands at $4.78 billion, underlining its strong performance in the market.
Despite a high Price/Earnings (P/E) ratio of 34.48, which suggests a premium valuation, Texas Roadhouse has demonstrated a consistent ability to reward shareholders, raising its dividend for 3 consecutive years and maintaining dividend payments for 14 consecutive years—a testament to its financial stability and commitment to shareholder returns.
InvestingPro Tips for Texas Roadhouse highlight that the stock trades with low price volatility, which could be appealing to investors seeking stability in their portfolio. Moreover, the company has a high return over the last year, with a 57.79% one-year price total return, indicating strong investor confidence and market performance.
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