On Friday, Loop Capital maintained a positive outlook on Texas Roadhouse (NASDAQ:TXRH) shares, raising the restaurant chain's price target from $165 to $190.
The adjustment follows Texas Roadhouse's announcement of a strong first quarter performance, which included a significant beat on comparable sales and earnings per share (EPS).
Texas Roadhouse reported a notable increase in company-owned comparable sales growth of 8.4% for the first quarter of 2024. This growth was driven by a 4.3% rise in customer traffic and a 4.1% increase in average check size. The reported EPS for the quarter was $1.69, surpassing both Loop Capital's estimate of $1.58 and the consensus estimate of $1.63.
The company's monthly performance showed consistent strength, with comparable sales growing by 4.2% in January, 10.4% in February, and 10.2% in March. These figures exceeded the forecasted growth of 6.8% and the consensus expectation of a 7.8% increase.
The bullish stance on Texas Roadhouse is further solidified by the firm's decision to maintain a Buy rating. The new price target of $190 is based on a 20 times multiple of the revised 2024 enterprise value to earnings before interest, taxes, depreciation, and amortization (EV/EBITDA) estimate.
Loop Capital's raised price target and sustained Buy rating reflect confidence in Texas Roadhouse's continued momentum and strong start to the second quarter of 2024. The company's first-quarter performance has set a positive tone for its financial outlook in the year ahead.
InvestingPro Insights
With Texas Roadhouse (NASDAQ:TXRH) displaying a robust start to the year, the company’s financial metrics provide additional insights into its market position. The restaurant chain boasts a substantial market capitalization of $10.5 billion, underlining its significant presence in the industry. The price-to-earnings (P/E) ratio stands at 34.57, which indicates a higher valuation compared to the industry average, and this is further supported by an adjusted P/E ratio for the last twelve months as of Q1 2024 at 31.8.
InvestingPro Tips reveal that Texas Roadhouse has demonstrated a commitment to shareholder returns by raising its dividend for 3 consecutive years, with a notable dividend growth of 32.61% in the last twelve months as of Q1 2024. Moreover, the company has maintained dividend payments for 14 consecutive years, showcasing its financial resilience and dedication to consistent returns. For investors seeking further insights, InvestingPro offers additional tips on Texas Roadhouse; using the coupon code PRONEWS24 provides an extra 10% off a yearly or biyearly Pro and Pro+ subscription.
Revenue growth remains a strong point for Texas Roadhouse, with a 13.73% increase in the last twelve months as of Q1 2024, and the company's operating income margin stands at a healthy 7.65%. These figures, combined with a 21.5% price total return over the last three months, suggest that the company's financial health is aligning with the positive market sentiment reflected in Loop Capital's analysis.
For a deeper dive into Texas Roadhouse's financials and to access the full range of InvestingPro Tips, visit https://www.investing.com/pro/TXRH. There are 17 additional tips available, which can provide investors with a more comprehensive understanding of the company's performance and potential investment value.
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