Cheesecake Factory (NASDAQ:CAKE) Stock Price Target Cut by Citigroup

Key Points

• Citigroup cut Cheesecake Factory’s price target modestly from $128 to $127 but maintained a “buy” rating, implying roughly 20% upside from the prior close.
• Analyst sentiment remains mixed: the stock carries a consensus “hold” rating with an average price target of $95.47, below its recent trading price of $105.73.
• Cheesecake Factory reported strong quarterly results, with EPS of $1.02 beating estimates and revenue rising 13.9% year over year to $1.03 billion. However, insiders sold approximately $22.3 million of stock over the past 90 days.

Cheesecake Factory (NASDAQ:CAKE - Get Free Report) had its price objective reduced by research analysts at Citigroup from $128.00 to $127.00 in a research note issued to investors on Wednesday, Benzinga reports. The firm presently has a "buy" rating on the restaurant operator's stock. Citigroup's price objective suggests a potential upside of 20.12% from the stock's previous close.

Several other research firms have also weighed in on CAKE. Stephens reaffirmed an "equal weight" rating and issued a $100.00 price objective on shares of Cheesecake Factory in a research note on Wednesday. Weiss Ratings upgraded Cheesecake Factory from a "buy (b)" rating to a "buy (b+)" rating in a research report on Thursday, October 8th. Jefferies Financial Group downgraded Cheesecake Factory from a "buy" rating to a "hold" rating and boosted their target price for the stock from $75.00 to $88.00 in a research note on Wednesday, July 29th. JPMorgan Chase & Co. increased their target price on shares of Cheesecake Factory from $92.00 to $105.00 and gave the stock a "neutral" rating in a report on Wednesday, August 26th. Finally, Mizuho raised their price target on shares of Cheesecake Factory from $93.00 to $110.00 and gave the company a "neutral" rating in a research note on Friday, October 23rd. One analyst has rated the stock with a Strong Buy rating, four have issued a Buy rating, eleven have issued a Hold rating and two have issued a Sell rating to the company. According to data from MarketBeat.com, the company has a consensus rating of "Hold" and a consensus price target of $95.47.

Cheesecake Factory Price Performance

Shares of NASDAQ CAKE traded down $2.74 during trading hours on Wednesday, hitting $105.73. 3,882,618 shares of the stock were exchanged, compared to its average volume of 1,419,686. The company's fifty day simple moving average is $107.77 and its two-hundred day simple moving average is $78.89. The company has a market cap of $5.26 billion, a PE ratio of 28.65, a price-to-earnings-growth ratio of 1.56 and a beta of 1.04. The company has a debt-to-equity ratio of 1.08, a quick ratio of 0.52 and a current ratio of 0.59. Cheesecake Factory has a 1-year low of $43.07 and a 1-year high of $118.63.

Cheesecake Factory (NASDAQ:CAKE - Get Free Report) last announced its quarterly earnings data on Tuesday, October 27th. The restaurant operator reported $1.02 EPS for the quarter, beating the consensus estimate of $0.96 by $0.06. The business had revenue of $1.03 billion during the quarter, compared to the consensus estimate of $1 billion. Cheesecake Factory had a net margin of 4.61% and a return on equity of 43.97%. The company's revenue was up 13.9% on a year-over-year basis. During the same period in the previous year, the business earned $0.66 earnings per share. On average, sell-side analysts predict that Cheesecake Factory will post 4.71 EPS for the current year.

Insider Buying and Selling

In related news, President David Gordon sold 31,950 shares of Cheesecake Factory stock in a transaction that occurred on Monday, August 10th. The stock was sold at an average price of $110.03, for a total value of $3,515,458.50. Following the transaction, the president directly owned 26,875 shares of the company's stock, valued at $2,957,056.25. The trade was a 54.31% decrease in their ownership of the stock. The transaction was disclosed in a legal filing with the Securities & Exchange Commission, which is available through the SEC website. Also, CFO Matthew Clark sold 68,900 shares of the company's stock in a transaction that occurred on Thursday, July 30th. The shares were sold at an average price of $99.30, for a total value of $6,841,770.00. Following the completion of the sale, the chief financial officer owned 45,109 shares in the company, valued at $4,479,323.70. The trade was a 60.43% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. Insiders sold 213,749 shares of company stock valued at $22,301,899 over the last 90 days. 8.00% of the stock is currently owned by corporate insiders.

Institutional Inflows and Outflows

A number of hedge funds and other institutional investors have recently modified their holdings of CAKE. Money Concepts Capital Corp increased its position in shares of Cheesecake Factory by 3.8% during the first quarter. Money Concepts Capital Corp now owns 5,802 shares of the restaurant operator's stock worth $318,000 after buying an additional 210 shares during the period. SBI Securities Co. Ltd. raised its position in shares of Cheesecake Factory by 28.2% in the 3rd quarter. SBI Securities Co. Ltd. now owns 1,146 shares of the restaurant operator's stock worth $121,000 after acquiring an additional 252 shares in the last quarter. Root Financial Partners LLC bought a new position in shares of Cheesecake Factory in the 3rd quarter worth about $35,000. Carolina Wealth Advisors LLC acquired a new position in shares of Cheesecake Factory in the 3rd quarter valued at about $36,000. Finally, NFSG Corp lifted its stake in shares of Cheesecake Factory by 115.8% in the 1st quarter. NFSG Corp now owns 682 shares of the restaurant operator's stock valued at $37,000 after purchasing an additional 366 shares during the period. Institutional investors and hedge funds own 94.48% of the company's stock.

Key Cheesecake Factory News

Here are the key news stories impacting Cheesecake Factory this week:

• Positive Sentiment: Record Q3 results exceeded expectations. Cheesecake Factory reported $1.02 in adjusted earnings per share versus a $0.96 consensus estimate, while revenue rose 13.9% year over year to $1.03 billion. Comparable sales at the namesake chain increased 15.2%, supported by strong guest traffic. Cheesecake Factory Logs Higher Revenue After Double-Digit Growth at Namesake Restaurants
• Positive Sentiment: Expansion plans strengthen the longer-term outlook. Management highlighted improving margins, continued traffic growth and an ambitious 2027 expansion plan for Flower Child, although North Italia remains a weaker point. The earnings call has prompted at least one analyst upgrade focused on the company’s traffic gains. CAKE Q3 Earnings Call Highlights Strong Traffic and 2027 Expansion
• Positive Sentiment: The quarterly dividend provides shareholder support. CAKE declared a $0.30-per-share quarterly dividend, equivalent to $1.20 annually and an approximately 1.1% yield.
• Neutral Sentiment: Political attention is raising the company’s profile but has limited direct earnings impact. Comments by Barack Obama and Donald Trump about the Cheesecake Factory’s décor have generated extensive media coverage and potentially increased brand visibility, but the controversy does not materially change the company’s fundamentals. What Does the Cheesecake Factory’s Designer Think of Obama and Trump’s Jabs at His Décor?
• Negative Sentiment: Valuation and analyst caution are weighing on the stock. Stephens reaffirmed an “equal weight” rating with a $100 price target, while UBS maintained a sell rating and an $80 target, arguing that the valuation looks stretched after the sharp rally. These targets suggest limited upside or substantial downside from recent levels. Sell Rating Maintained on Cheesecake Factory as Valuation Seen Stretched

About Cheesecake Factory

The Cheesecake Factory Incorporated is a restaurant company best known for The Cheesecake Factory, a full-service casual dining brand offering an extensive menu of American and international-inspired dishes, along with a broad selection of cheesecakes and other desserts. The company also operates North Italia, an Italian restaurant concept, and owns Fox Restaurant Concepts, which develops and operates additional restaurant brands, including Flower Child and Culinary Dropout.

The company was founded by David Overton, who opened the first Cheesecake Factory restaurant in Beverly Hills, California, in 1978 after his parents began a cheesecake business.

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