Ruth's Hospitality (NASDAQ:RUTH) Faces Food Cost Inflation

Food costs will have the restaurant sector under pressure in 2011, and Ruth's Hospitality (NASDAQ:RUTH) will participate in that challenge.

Jefferies lowered their full year 2011 and 2012 EPS estimates on Ruth's in response, dropping them from $0.37 and $0.41 to $0.32 and $0.39.

Over the long haul Jefferies has confidence in Ruth's, as higher-income spending has increased, catering to the strengths of Ruth's.

Jefferies maintains a "Buy" rating on Ruth's, which closed Tuesday at $5.09, down $0.16, or 3.05 percent. Jefferies increased their price target on Ruth's from $5.25 to $6.