The Cheesecake Factory Incorporated (CAKE) Raised to “Hold” at Zacks Investment Research

Zacks Investment Research upgraded shares of The Cheesecake Factory Incorporated (NASDAQ:CAKE) from a sell rating to a hold rating in a report issued on Friday, October 27th.

According to Zacks, “Cheesecake Factory’s differentiated menu, operational distinction and unique ambiance appeal to customers. The company's several initiatives to boost sales and traffic volume like menu innovation, roll out of an improved server training program, launch of mobile payment app and increased focus on delivery service should help in future comps growth. However, the company’s profits have been under pressure owing to a rise in rates of wages. Higher labor and pre-openings costs coupled with expenses related to sales initiatives are likely to continue to hurt margins. Notably, Cheesecake Factory’s shares have underperformed the industry year to date. Estimates for the current quarter and year have also moved downward over the past 60 days, reflecting analyst's concern. Underperformance by Grand Lux Cafe further adds to the woes. Also, a lowered fiscal 2017 outlook due to a challenging U.S. restaurant space raises caution.”

Several other brokerages have also issued reports on CAKE. BidaskClub lowered The Cheesecake Factory from a sell rating to a strong sell rating in a research report on Thursday, July 27th. Wells Fargo & Company decreased their price target on shares of The Cheesecake Factory from $46.00 to $43.00 and set a market perform rating for the company in a research note on Tuesday, October 24th. Nomura reduced their price objective on shares of The Cheesecake Factory from $50.00 to $44.00 and set a neutral rating for the company in a research note on Thursday, August 3rd. Wedbush started coverage on shares of The Cheesecake Factory in a report on Monday, July 10th. They issued an outperform rating and a $57.00 price target on the stock. They noted that the move was a valuation call. Finally, Jefferies Group LLC reaffirmed a hold rating and issued a $46.00 price target on shares of The Cheesecake Factory in a report on Thursday, September 7th. Two research analysts have rated the stock with a sell rating, fourteen have given a hold rating and four have assigned a buy rating to the company. The company has a consensus rating of Hold and a consensus target price of $49.24.

The Cheesecake Factory (NASDAQ:CAKE) traded down $0.02 on Friday, reaching $44.29. The company had a trading volume of 1,311,200 shares, compared to its average volume of 1,087,946. The stock has a market capitalization of $2,028.75, a price-to-earnings ratio of 16.23, a P/E/G ratio of 1.18 and a beta of 0.29. The Cheesecake Factory has a 12 month low of $38.34 and a 12 month high of $67.14. The company has a current ratio of 0.51, a quick ratio of 0.37 and a debt-to-equity ratio of 0.05.

The Cheesecake Factory (NASDAQ:CAKE) last released its quarterly earnings results on Wednesday, November 1st. The restaurant operator reported $0.56 EPS for the quarter, missing the Thomson Reuters’ consensus estimate of $0.60 by ($0.04). The Cheesecake Factory had a return on equity of 21.65% and a net margin of 5.76%. The company had revenue of $555.40 million during the quarter, compared to analysts’ expectations of $566.09 million. During the same quarter in the prior year, the business posted $0.70 EPS. The company’s revenue was down .8% on a year-over-year basis. analysts predict that The Cheesecake Factory will post 2.61 earnings per share for the current year.

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The company also recently disclosed a quarterly dividend, which will be paid on Tuesday, November 28th. Shareholders of record on Wednesday, November 15th will be given a $0.29 dividend. The ex-dividend date is Tuesday, November 14th. This represents a $1.16 dividend on an annualized basis and a dividend yield of 2.62%. The Cheesecake Factory’s dividend payout ratio (DPR) is currently 42.80%.

In other The Cheesecake Factory news, Director Herbert Simon acquired 25,000 shares of the business’s stock in a transaction on Monday, November 6th. The stock was bought at an average price of $43.50 per share, for a total transaction of $1,087,500.00. The purchase was disclosed in a filing with the SEC, which is available at this hyperlink. Also, VP Debby R. Zurzolo sold 2,415 shares of the stock in a transaction dated Thursday, November 9th. The shares were sold at an average price of $44.20, for a total transaction of $106,743.00. The disclosure for this sale can be found here. In the last 90 days, insiders have purchased 25,730 shares of company stock valued at $1,119,535. Insiders own 8.40% of the company’s stock.

A number of hedge funds have recently added to or reduced their stakes in CAKE. BlackRock Inc. raised its holdings in The Cheesecake Factory by 21,381.3% in the 1st quarter. BlackRock Inc. now owns 4,842,308 shares of the restaurant operator’s stock valued at $306,812,000 after acquiring an additional 4,819,766 shares during the last quarter. Kayne Anderson Rudnick Investment Management LLC grew its stake in shares of The Cheesecake Factory by 54.8% in the 3rd quarter. Kayne Anderson Rudnick Investment Management LLC now owns 2,457,364 shares of the restaurant operator’s stock valued at $103,504,000 after buying an additional 869,579 shares during the period. First Trust Advisors LP grew its stake in shares of The Cheesecake Factory by 750.5% in the 3rd quarter. First Trust Advisors LP now owns 580,508 shares of the restaurant operator’s stock valued at $24,451,000 after buying an additional 512,255 shares during the period. Renaissance Technologies LLC purchased a new stake in shares of The Cheesecake Factory in the 2nd quarter valued at approximately $25,369,000. Finally, Epoch Investment Partners Inc. grew its stake in shares of The Cheesecake Factory by 207.7% in the 3rd quarter. Epoch Investment Partners Inc. now owns 734,252 shares of the restaurant operator’s stock valued at $30,926,000 after buying an additional 495,642 shares during the period. Institutional investors own 98.67% of the company’s stock.

The Cheesecake Factory Company Profile

The Cheesecake Factory Incorporated is engaged in the restaurant and bakery business. As of March 2, 2017, the Company operated 208 Company-owned restaurants: 194 under The Cheesecake Factory mark, 13 under the Grand Lux Cafe mark and one under the Rock Sugar Pan Asian Kitchen mark. The Company’s segments include The Cheesecake Factory restaurants, and other.

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Analyst Recommendations for The Cheesecake Factory (NASDAQ:CAKE)

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