Mizuho cuts Texas Roadhouse stock price target on sales slowdown

Mizuho has reduced its price target on Texas Roadhouse stock to $190 from $230 while keeping its Outperform rating. The company's stock is trading at $161.50, just 5% above its 52-week low of $153.82. Mizuho attributes the slowdown in same-store sales growth to a social media hoax from late August, viewing it as a temporary setback rather than a shift in the restaurant chain's long-term growth prospects.

The firm believes Texas Roadhouse's pricing below inflation helps maintain its relative value proposition. Despite lowering same-store sales growth estimates for the third and fourth quarters, Mizuho anticipates that proactive management messaging will mitigate the impact by the end of the year. The firm also expects better second-half 2026 comparisons to boost 2027 same-store sales growth.

According to InvestingPro analysis, the stock appears undervalued at the current price. The analyst highlights cost of goods sold as a potential upside due to declining retail beef demand. Mizuho sees Texas Roadhouse's valuation premium over its peers expanding as transaction-led same-store sales growth returns to normal and margin expansion nears pre-beef inflation levels. The new price target implies a valuation of 14.5 times enterprise value to 2027 EBITDA.