NEW YORK (AP) -- Shares of Ruth's Hospitality Group Inc. fell Thursday after a Raymond James analyst lowered his rating on the company, saying he sees limited growth potential for the owner of Ruth's Chris Steak House.
Analyst Michael Turits noted that further expansion could be difficult in light of the challenging outlook for demand, with consumer spending expected to slow as a result of higher taxes. He also noted rising costs for beef would likely pressure profit margins. He said that the company's stock price has climbed 27 percent since late October, pushing it above his previous 12-month price target of $7.50.
Turits kept his fourth-quarter and full -year earnings estimates at 14 cents and 50 cents per share, respectively. He lowered his rating to "market perform" from "outperform."
The company's stock was down 6.3 percent, or 52 cents, at $7.70 in afternoon trading.
Ruth's Hospitality, based in Winter Park, Fla., owns Ruth's Chris Steak House, Mitchell's Fish Market and a handful of other restaurants.
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