Texas Roadhouse (TXRH) should post solid same-store sales and traffic momentum in Q2 despite macro headwinds, with elevated beef prices continuing to weigh on restaurant margins, UBS said in a note emailed Monday.
The bank expects underlying sales strength to persist into the second half, supported by brand affinity, menu value, expanded beverage offerings, and technology upgrades improving speed of service.
UBS said long-term margins of 17-18% remain achievable as beef costs eventually normalize, with the stock still offering upside given its unit growth outlook within the full-service restaurant space.
UBS reiterated a buy rating on the stock and raised the price target to $235 from $210.
Price: $210.64, Change: $+5.19, Percent Change: +2.53%