Cheesecake Factory (NASDAQ:CAKE) Upgraded to “Strong-Buy” at Freedom Capital

Freedom Capital upgraded shares of Cheesecake Factory (NASDAQ:CAKE) from a hold rating to a strong-buy rating in a research note issued to investors on Wednesday morning,Zacks reports.

CAKE has been the topic of several other research reports. Stephens reissued an “equal weight” rating and set a $100.00 price objective on shares of Cheesecake Factory in a report on Wednesday. JPMorgan Chase & Co. upped their target price on Cheesecake Factory from $92.00 to $105.00 and gave the stock a “neutral” rating in a report on Wednesday, August 26th. Morgan Stanley increased their target price on Cheesecake Factory from $80.00 to $87.00 and gave the company an “equal weight” rating in a research report on Thursday, October 15th. William Blair reissued an “outperform” rating on shares of Cheesecake Factory in a research note on Thursday. Finally, Bank of America lifted their price target on Cheesecake Factory from $66.00 to $79.00 and gave the company a “neutral” rating in a research note on Thursday, July 2nd. One investment analyst has rated the stock with a Strong Buy rating, five have assigned a Buy rating, twelve have given a Hold rating and two have assigned a Sell rating to the stock. According to MarketBeat.com, the company currently has a consensus rating of “Hold” and an average target price of $95.47.

Cheesecake Factory Price Performance

CAKE stock opened at $113.12 on Wednesday. The company has a 50 day simple moving average of $107.90 and a 200 day simple moving average of $79.42. The stock has a market cap of $5.63 billion, a price-to-earnings ratio of 26.81, a P/E/G ratio of 1.48 and a beta of 1.04. Cheesecake Factory has a 1 year low of $43.07 and a 1 year high of $118.63. The company has a debt-to-equity ratio of 1.08, a current ratio of 0.59 and a quick ratio of 0.52.

Cheesecake Factory (NASDAQ:CAKE) last issued 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 $1.01 billion. Cheesecake Factory had a net margin of 5.20% and a return on equity of 46.95%. The firm’s revenue was up 13.9% compared to the same quarter last year. During the same quarter in the prior year, the firm earned $0.66 EPS. Research analysts anticipate that Cheesecake Factory will post 4.75 EPS for the current fiscal year.

Cheesecake Factory Dividend Announcement

The firm also recently disclosed a quarterly dividend, which will be paid on Tuesday, November 24th. Investors of record on Tuesday, November 10th will be paid a $0.30 dividend. The ex-dividend date of this dividend is Tuesday, November 10th. This represents a $1.20 annualized dividend and a dividend yield of 1.1%. Cheesecake Factory’s payout ratio is currently 32.52%.

Insider Buying and Selling

In other Cheesecake Factory news, Director Janice L. Meyer sold 1,958 shares of Cheesecake Factory stock in a transaction dated Monday, August 17th. The stock was sold at an average price of $109.36, for a total transaction of $214,126.88. Following the transaction, the director directly owned 21,251 shares of the company’s stock, valued at approximately $2,324,009.36. The trade was a 8.44% decrease in their position. The sale was disclosed in a filing with the Securities & Exchange Commission, which can be accessed through this link. Also, Chairman David Overton sold 94,145 shares of the company’s stock in a transaction dated Wednesday, August 5th. The shares were sold at an average price of $106.27, for a total value of $10,004,789.15. Following the completion of the sale, the chairman owned 89,805 shares in the company, valued at $9,543,577.35. This trade represents a 51.18% decrease in their position. Additional details regarding this sale are available in the official SEC disclosure. Over the last three months, insiders have sold 131,176 shares of company stock valued at $14,068,161. Company insiders own 8.00% of the company’s stock.

Hedge Funds Weigh In On Cheesecake Factory

A number of hedge funds and other institutional investors have recently made changes to their positions in the stock. Root Financial Partners LLC acquired a new stake in Cheesecake Factory during the 3rd quarter valued at approximately $35,000. Carolina Wealth Advisors LLC acquired a new position in shares of Cheesecake Factory in the 3rd quarter worth approximately $36,000. Allworth Financial LP bought a new stake in shares of Cheesecake Factory in the 2nd quarter valued at $36,000. NFSG Corp boosted 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 last quarter. Finally, Global Retirement Partners LLC acquired a new stake in shares of Cheesecake Factory during the second quarter worth $57,000. 94.48% of the stock is owned by institutional investors and hedge funds.

Key Stories Impacting Cheesecake Factory

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

• Positive Sentiment: Strong traffic and earnings beat: Third-quarter revenue exceeded $1.033 billion, while flagship restaurant guest traffic increased 9.5%. CAKE reported $1.02 in EPS versus the $0.96 consensus estimate, and revenue grew 13.9% year over year. Cheesecake Factory: 3 Key Takeaways for Long-Term Investors
• Positive Sentiment: Expansion supports the longer-term outlook: Management highlighted improving margins, strong traffic and plans to expand the Flower Child concept in 2027, although North Italia remains a challenge. CAKE Q3 Earnings Call Highlights Strong Traffic and 2027 Expansion
• Positive Sentiment: Some analyst support remains: Citigroup maintained a Buy rating while trimming its price target slightly to $127, implying upside from the referenced price level. Citigroup stock recommendations
• Neutral Sentiment: Dividend maintained: CAKE declared a $0.30-per-share quarterly dividend, or $1.20 annualized, with a stated yield of approximately 1.1%. The ex-dividend date is November 10.
• Negative Sentiment: Valuation concerns are weighing on shares: Stephens reaffirmed an Equal Weight rating with a $100 target, while UBS maintained a Sell rating and an $80 target, arguing that the stock’s valuation is stretched. The move below the 50-day average followed an analyst downgrade. Cheesecake Factory stock crosses below 50 day moving average
• Neutral Sentiment: Political attention is generating publicity but little direct financial impact: Multiple reports focused on Barack Obama’s jokes about the chain and the resulting political backlash. The coverage may increase brand visibility, but it does not change CAKE’s earnings outlook or fundamentals.

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.