Bet on Steak and Pizza for Big Returns

By Christiana Sciaudone

Investing.com — It’s ribeye and pizza for the win.

Texas Roadhouse (NASDAQ:TXRH) and Papa John’s rallied after getting favorable notes from analysts.

Truist Securities initiated covering of the steak house with a buy rating and a price target of $93, which compares to the $79.47 average price target. The positive rating is among six buys for TXRH, which has 14 holds and no sells.

“TXRH is the 4th largest full-service restaurant chain in the US and largest in the steak category,” analyst Jake Bartlett said in a note, according to StreetInsider. During the post-Covid recovery (whenever that may be), the analyst expects strong sales growth and margins above those from pre-Covid times.

Shares are up almost 2%, after hitting a record last month.

Truist sees upside of about 13% to consensus 2022 profit estimates.

Across town, Longbow named Papa John’s of garlic dip fame a top pick, saying it sees more innovation in the company’s product pipeline, CNBC reported.

“While the COVID-19 outbreak undoubtedly benefited PZZA’s predominantly delivery/take-out focused model, we believe a portion of investors lost sight in the process of substantial internal improvements implemented by new management over the last 12+ months,” Longbow said.

Papa John’s hit a record mid-last year with delivery demand up as we sat at home shunning the coronavirus and getting tired of cooking.

Papa John’s rose almost 4%.