BMO Capital Raises PT on Texas Roadhouse (TXRH) from $155 to $170, Reiterates “Market Perform” Rating

Core Viewpoint - Texas Roadhouse, Inc. (NASDAQ:TXRH) is considered one of the best restaurant stocks to buy currently, despite facing challenges in the restaurant sector [1]. Group 1: Analyst Ratings and Price Targets - BMO Capital raised its price target for Texas Roadhouse from $155 to $170 while maintaining a "Market Perform" rating, indicating a cautious outlook for the restaurant sector due to ongoing consumer spending pressures and margin constraints [2]. - Wells Fargo upgraded Texas Roadhouse to "Overweight," suggesting that the recent share price decline of approximately 6.35% since early August and over 10% in the past six months has created an attractive entry point for investors [3]. Group 2: Financial Performance and Market Conditions - The restaurant sector is expected to face continued challenges in 2026, with widespread stock declines and double-digit reductions in earnings outlooks already observed in the previous year [2]. - Rising beef costs are impacting earnings expectations for 2025, but these pressures are viewed as cyclical rather than structural, with Texas Roadhouse maintaining a strong value proposition and mid-single-digit traffic growth [3]. - Despite soft expectations for the fourth quarter, there is an anticipation of share price improvement in early 2026 due to easier comparisons, consumer stimulus, and a projected peak in beef costs around Q2 2026 [3]. Group 3: Investment Considerations - While Texas Roadhouse shows potential as an investment, there are suggestions that certain AI stocks may offer greater upside potential with less downside risk [4].