Texas Roadhouse (TXRH) delivered a modest Q2 beat, driven by stronger comparable sales that exceeded market expectations, Morgan Stanley said in a note Friday.
The note said Q2 same-store sales growth of 6.2% was ahead of the Street's expectation of 5.9%. Momentum has continued into Q3, with quarter-to-date SSS running ahead of expectation.
The report said Q3 SSS growth forecast is raised to 6.2% from 5.6%, supported by stronger traffic and an improving sales mix, partly offset by lower pricing.
"Top line results remain mostly consistent, though the company noted slightly less pricing vs consensus in 4Q/1Q, and slight holiday headwinds in the 4Q also, both of which we account for here," the report said.
Morgan Stanley raised its price target to $212 from $201 while keeping its overweight rating.
Price: 206.66, Change: -1.51, Percent Change: -0.73
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