Tuesday’s Top Upgrades (and Downgrades): Cracker Barrel Old Country Store, Inc. (CBRL), Texas Roadhouse Inc (TXRH), Aurizon Mines Ltd. Aurizon Mines Ltd. (USA) (AZK)

Page 1 of 2

Cracker Barrel (CBRL)This series, brought to you by Yahoo! Finance, looks at which upgrades and downgrades make sense, and which ones investors should act on. Today, our headlines feature downgrades for Texas Roadhouse Inc (NASDAQ:TXRH) and Aurizon Mines Ltd. (NYSEMKT:AZK) . But it’s not all bad news, so read on, and find out why one analyst thinks you should…

Fill up on Cracker Barrel Old Country Store, Inc. (NASDAQ:CBRL)
Another day, another higher price target for Cracker Barrel Old Country Store, Inc. (NASDAQ:CBRL) . Last week, we were talking about how the country store-cum-country cookin’ restaurant parlayed an $0.18-per-share “earnings beat” into a new $81 price target at analyst Miller Tabak. Today, analysts at Argus Research are going even further than that — reiterating their buy rating on the stock and predicting that before a year is out, Cracker Barrel shares will be fetching $88 apiece.

Now here’s the problem: I was a bit ambivalent when Miller Tabak endorsed Cracker Barrel Old Country Store, Inc. (NASDAQ:CBRL)¬†last week, because at 15.7 times earnings, but only 10% projected long-term earnings growth, the stock looked overvalued to me. Today, Argus is both arguing for a higher price target ($88 versus $81) and saying Cracker Barrel Old Country Store, Inc. (NASDAQ:CBRL)¬†will get there from a higher starting point (16.3 times earnings versus 15.7).

Needless to say, Argus is setting itself a higher hurdle on this one, and one more difficult to clear. (Worth saying, though, is that investors seem to recognize this, and are currently selling off Cracker Barrel shares despite Argus’s endorsement — a pretty clear case of “sell the news” if I ever saw one.)

My hunch: Cracker Barrel is fairly valued today. Maybe even a bit overvalued. That said, if you’re dead set on owning it, the workaround I described last week is still there for the taking. Biglari Holdings (NYSE:BH) , which owns a 20% stake in Cracker Barrel and sells for a cheaper price-to-free cash flow ratio, with a faster growth rate, offers a compelling way to buy a piece of Cracker Barrel’s growth without paying the sticker price on Cracker Barrel stock. I like it so much, I own it myself.

Don’t stop at Texas Roadhouse Inc (NASDAQ:TXRH)
Continuing today’s comfort-food theme, our second analyst recommendation today concerns Texas Roadhouse. Once again, it’s Miller Tabak stepping up to lend some advice. This time, however, Miller is feeling more cautious, downgrading TR to hold, and recommending investors be more cautious about the stock.

Page 1 of 2
Comments
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months. Our beta is only 1.2 (don't click this link if beating the market isn't important to you).

Lists

Richest Doctors in the World

The Best Movie Sountracks Ever

The Highest Grossing Musicals on Broadway

The Most Successful Reality TV Stars

Cheapest Cities to Visit in the US

Most Expensive Summer Camps

Most Expensive Animals in the World

Most Expensive Specialty Crops in the World

Movies That Took Ages to Make

The Longest Hollywood Films Ever Made

Most Expensive Concert Stages

The Richest Bands of all Time

10 Most Corrupt Countries 2013 List

10 Countries with the Highest Quality of Life Index

Most Expensive Mattresses in the World

5 Smallest Countries by Land Area

The Ultimate Heartbreak Songs

Richest Teenagers in the World

10 Most Haunted Places in America

10 Best Places to Retire in Florida East Coast

Top 10 Places to See Before You Die

Top 8 Countries in the World Where Justice Prevails

10 Richest States in America

15 Wealthiest Countries in the World

Richest Singers in the World

Most Expensive Tasting Menu in New York City

Most Expensive Baby Items in the World

Most Expensive Hotel Suites in Vegas

Most Expensive Brunch in New York City

Most Expensive Beef Cuts in the World

25 Best Colleges to Get a Job

Top 10 US Supermarkets

The 25 Most Dangerous Cities in the World to Visit

Most Expensive Xbox Games

Top 11 Cities Where Billionaires Live

Top 10 Most Charitable Companies in America

Most Expensive Seafood in the World

The 10 Wildest Conspiracy Theories

The 10 Best Job Markets in the US

Top 10 Accounting Scandals of All Time

The 25 Biggest Cities in the World

Top 10 Best Paying Virtual Jobs

Most Expensive Leather Shoes in the World

Top 6 Things to Buy in March

The 10 Most Stressful Jobs in America – 2014 List

Top 10 Jobs for Introverted People

Top 10 Honeymoon Destinations in the World

Top 10 Highest Paying Jobs in the World

Most Expensive Day-Care in New York City

The 10 Cheapest Places to Retire Abroad

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!