Truist Securities has downgraded Texas Roadhouse from Buy to Hold, citing persistent beef cost inflation that could limit margin expansion through 2027. The firm lowered its price target to $188 from $206 and reduced its 2027 earnings estimate to $8.12 per share from $8.57. The downgrade reflects concerns that sustained higher beef prices will pressure restaurant-level margins.

Truist expects beef cost inflation to remain elevated at approximately 7% in 2026 and 1.5% in 2027, compared to earlier projections for a decline. The firm noted that Texas Roadhouse has historically shown an inverse relationship with beef prices, making the stock particularly sensitive to rising input costs. The brokerage also cited that the company's strong same-store sales growth is already priced into the shares, leaving limited upside potential.

While maintaining that Texas Roadhouse remains well-positioned from a demand perspective, Truist sees constrained near-term upside until input cost pressures ease or shares pull back. The firm expects the company to gradually increase menu prices to offset higher beef costs, with planned adjustments in 2026 aimed at helping margins recover over time. The stock currently trades close to historical valuation levels and near record highs.