In a report released yesterday, Brian Bittner from Oppenheimer maintained a Hold rating on Cheesecake Factory (CAKE). The company’s shares closed yesterday at $46.81.
Bittner noted:
“We provide analysis on the potential 3Q acquisition of North Italia and reiterate our Perform rating. Based on our work, the $150M deal is likely “neutral” to EPS in year one using North’s newly disclosed P&L metrics and assuming an all-debt transaction. After 2020 the transaction could add 1-2% to EPS annually as the model leverages the brand’s 20% unit growth rate. Separately, we believe overall earnings upside in ’19E appears restricted which keeps us at Perform. Mgmt’s guidance assumes “flat” core restaurant margins, which tilts optimistically given cost inflation. CAKE’s normalized SSS trends and take-out candidacy likely keep a healthy floor on valuation.”
According to TipRanks.com, Bittner is a 5-star analyst with an average return of 11.0% and a 67.6% success rate. Bittner covers the Services sector, focusing on stocks such as Restaurant Brands International, Jack In The Box Inc, and Yum China Holdings.
Cheesecake Factory has an analyst consensus of Hold, with a price target consensus of $50.30, implying a 7.5% upside from current levels. In a report issued on February 21, Wedbush also maintained a Hold rating on the stock with a $48 price target.
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The company has a one-year high of $60.19 and a one-year low of $41.63. Currently, Cheesecake Factory has an average volume of 820.5K.
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Cheesecake Factory, Inc. engages in the operation of chain restaurants. Its menu offering includes appetizers, pizza, seafood, steaks, chicken, burgers, small plates, pastas, salads, sandwiches, omelettes, and desserts. The company was founded by David M. Overton, Oscar Overton, and Evelyn Overton in 1972 and is headquartered in Calabasas Hills, CA.
