Bear of the Day: Texas Roadhouse (TXRH)

Texas Roadhouse TXRH is a full-service, casual dining restaurant chain that offers a variety of food and steaks, which are hand-cut daily on the premises and cooked to order over open gas-fired grills.Analysts have taken a bearish stance on the company’s EPS outlook, landing it into a Zacks Rank #5 (Strong Sell).Image Source: Zacks Investment ResearchWhat’s going on? Let’s take a closer look.TXRH Faces Commodity InflationTXRH’s quarterly releases have largely been mixed concerning headline results, with the company regularly beating our consensus EPS estimate but falling short of sales expectations.Adjusted EPS fell -0.8% YoY throughout the latest period, with sales up 13%. Notably, comparable restaurant sales were up a strong 6.1%, with average weekly sales at restaurants also improving from the year-ago period.Below is a chart illustrating the company’s sales on a quarterly basis.Image Source: Zacks Investment ResearchStill, the real thorn in TXRH's side has been commodity inflation, with the company updating its commodity inflation guidance to roughly 6% post-earnings vs. the 5.2% forecast in its Q2 release.Jerry Morgan, CEO, said –‘Our operators continued to drive strong traffic this quarter, which helped offset the impact of continued commodity inflation. While the duration of these inflationary pressures remains uncertain, we are committed to running our business with a long-term focus and maintaining our value proposition.’Bottom LineNegative earnings estimate revisions, stemming from a challenging operating environment, paint a challenging picture for the company’s shares in the near term.Texas Roadhouse TXRH is a Zacks Rank #5 (Strong Sell), indicating that analysts have taken a bearish stance on the company’s earnings outlook.For those seeking strong stocks, the best idea would be to focus on stocks with a Zacks Rank #1 (Strong Buy) or a Zacks Rank #2 (Buy) – these stocks sport a notably stronger earnings outlook paired with the potential to deliver explosive gains in the near term.Zacks Names #1 Semiconductor StockThis under-the-radar company specializes in semiconductor products that titans like NVIDIA don't build. It's uniquely positioned to take advantage of the next growth stage of this market. And it's just beginning to enter the spotlight, which is exactly where you want to be.With strong earnings growth and an expanding customer base, it's positioned to feed the rampant demand for Artificial Intelligence, Machine Learning, and Internet of Things. Global semiconductor manufacturing is projected to explode from $452 billion in 2021 to $971 billion by 2028.See This Stock Now for Free >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Texas Roadhouse, Inc. (TXRH): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks