We're buying more of this beaten-up stock that an analyst just upgraded

Skip NavigationMarketsBusinessInvestingTechPoliticsVideoWatchlistInvesting ClubPROLivestreamMenuShortly after the opening bell, we will be buying 70 shares of Texas Roadhouse at roughly $167.92. Following the trade, Jim Cramer's Charitable will own 600 shares of TXRH, increasing its weighting to 2.60% from 2.30%. Texas Roadhouse was one of the seven out-of-favor stocks Jim highlighted on last Friday's Monthly Meeting as names that he wanted to buy. He pointed out that Texas Roadhouse consistently delivers some of the best comparable sales in the restaurant category because it has largely held the line on price despite beef cost headwinds. But he thinks management's 2026 cost inflation guidance provided last quarter has derisked next year, creating opportunities for upside if beef prices fall. Analysts at Wells Fargo are in agreement with our optimistic view of Texas Roadhouse. On Wednesday, they upgraded their rating on the stock to a buy-equivalent overweight and raised their price target to $195 from $170. We're following Wells by upgrading our own rating to a 1 and adding to our position. We all know Texas Roadhouse isn't having any problems getting people to eat at their restaurants. Wells Fargo expects the company's mid-single-digit growth to continue in 2026, supported by value-seeking customers and some benefits from tax refund related stimulus. But what we liked most about the upgrade is the sign that the worst of the beef headwinds are in the stock at these levels. Wells Fargo believes 10% inflation is largely priced into Texas Roadhouse for the next three to four quarters, and any moderation before then would drive margin upside. We've been waiting for a call to buy Texas Roadhouse on moderating beef inflation. With cost pressures near or at their peak, we're buying more shares. (Jim Cramer's Charitable Trust is long TXRH. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust's portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.We're halving our position in this slumping stock and will pocket a 200% gainJeff MarksWe're booking some big profits in an AI data center energy play after the stock's big rallyJeff MarksWe're booking some big profits in a bank stock near record highs that we still loveJeff MarksRead More