RBC Capital upgraded Texas Roadhouse to Outperform from Sector Perform with a price target of $210, up from $180. The firm sees potential for beef prices to be "less unfavorable" for Texas Roadhouse, driving upside to out-year margin expectations. Despite the uncertain timing of herd rebuilding, the stock's risk/reward skews favorably, the analyst tells investors in a research note. RBC says Texas Roadhouse offers "durable" traffic growth with potential for upside driven by share gains from both retail and steakhouse competitors. In addition, the company's kitchen capacity "unlocks incremental to-go orders which are accretive to margins," adds the firm.
