UPDATE: J.P. Morgan Downgrades Texas Roadhouse on Fair Valuation

In a report published Tuesday, J.P. Morgan analyst John Ivankoe downgraded Texas Roadhouse (NASDAQ: TXRH) from Overweight to Neutral, but raised the price target from $23.00 to $25.00.

In the report, J.P. Morgan noted, “We see fair valuation as we believe top-line momentum/outperformance relative to industry and potential cost savings are fully reflected in stock. We have emphasized in the past the sales/margin levers that the company has to pull, including previously discussed restaurant-level cost savings and low pricing relative to industry peers, both of which management have already implemented for 2013, as well as capacity increases at existing restaurants (‘bumpouts'). We now believe these opportunities are fairly reflected in the share price and recommend waiting for a better entry point.”

Texas Roadhouse closed on Monday at $25.07.