Citigroup Issues Pessimistic Forecast for Cheesecake Factory (NASDAQ:CAKE) Stock Price

Cheesecake Factory (NASDAQ:CAKE) had its target price reduced by stock analysts at Citigroup from $128.00 to $127.00 in a research report issued on Wednesday, Benzinga reports. The firm currently has a “buy” rating on the restaurant operator’s stock. Citigroup‘s price objective would suggest a potential upside of 20.12% from the stock’s previous close.

A number of other equities analysts have also recently issued reports on the company. UBS Group increased their target price on Cheesecake Factory from $60.00 to $80.00 and gave the stock a “sell” rating in a report on Friday, October 23rd. Mizuho lifted their price target on shares of Cheesecake Factory from $93.00 to $110.00 and gave the company a “neutral” rating in a research report on Friday, October 23rd. Morgan Stanley boosted their price target on shares of Cheesecake Factory from $80.00 to $87.00 and gave the company an “equal weight” rating in a research note on Thursday, October 15th. Wells Fargo & Company set a $116.00 price objective on shares of Cheesecake Factory in a report on Wednesday. Finally, Zacks Research raised shares of Cheesecake Factory from a “hold” rating to a “strong-buy” rating in a research note on Thursday, July 30th. One research analyst has rated the stock with a Strong Buy rating, four have given a Buy rating, eleven have given a Hold rating and two have given a Sell rating to the stock. According to MarketBeat, the company has a consensus rating of “Hold” and a consensus price target of $95.47.

Cheesecake Factory Stock Down 2.5%

CAKE stock traded down $2.74 during trading on Wednesday, reaching $105.73. 3,882,618 shares of the stock were exchanged, compared to its average volume of 1,419,686. The firm’s 50 day moving average is $107.77 and its 200 day moving average is $78.89. Cheesecake Factory has a twelve month low of $43.07 and a twelve month high of $118.63. The company has a current ratio of 0.59, a quick ratio of 0.52 and a debt-to-equity ratio of 1.08. The firm has a market cap of $5.26 billion, a P/E ratio of 28.65, a price-to-earnings-growth ratio of 1.56 and a beta of 1.04.

Cheesecake Factory (NASDAQ:CAKE) last announced its quarterly earnings results on Tuesday, October 27th. The restaurant operator reported $1.02 earnings per share (EPS) for the quarter, topping the consensus estimate of $0.96 by $0.06. Cheesecake Factory had a return on equity of 43.97% and a net margin of 4.61%. The business had revenue of $1.03 billion for the quarter, compared to analyst estimates of $1 billion. During the same quarter in the prior year, the company earned $0.66 earnings per share. The company’s quarterly revenue was up 13.9% on a year-over-year basis. As a group, research analysts forecast that Cheesecake Factory will post 4.71 EPS for the current year.

Insiders Place Their Bets

In other news, Chairman David Overton sold 94,145 shares of the business’s stock in a transaction that occurred on Wednesday, August 5th. The stock was sold at an average price of $106.27, for a total value of $10,004,789.15. Following the transaction, the chairman owned 89,805 shares in the company, valued at $9,543,577.35. The trade was a 51.18% decrease in their position. The sale was disclosed in a filing with the Securities & Exchange Commission, which is available at this hyperlink. Also, EVP Scarlett May sold 7,978 shares of the company’s stock in a transaction on Friday, July 31st. The shares were sold at an average price of $102.66, for a total value of $819,021.48. Following the completion of the transaction, the executive vice president owned 18,241 shares of the company’s stock, valued at $1,872,621.06. This trade represents a 30.43% decrease in their position. The SEC filing for this sale provides additional information. Insiders sold a total of 213,749 shares of company stock worth $22,301,899 in the last ninety days. 8.00% of the stock is owned by corporate insiders.

Institutional Inflows and Outflows

A number of hedge funds and other institutional investors have recently added to or reduced their stakes in the stock. Public Employees Retirement System of Ohio bought a new position in shares of Cheesecake Factory in the 2nd quarter worth $2,367,000. Oppenheimer Asset Management Inc. bought a new stake in Cheesecake Factory during the second quarter valued at about $2,606,000. Corient Private Wealth LP boosted its position in Cheesecake Factory by 269.9% during the second quarter. Corient Private Wealth LP now owns 100,951 shares of the restaurant operator’s stock valued at $8,030,000 after purchasing an additional 73,659 shares in the last quarter. The Manufacturers Life Insurance Company bought a new stake in Cheesecake Factory during the second quarter valued at about $1,731,000. Finally, Headlands Technologies LLC grew its stake in Cheesecake Factory by 29.7% in the second quarter. Headlands Technologies LLC now owns 42,640 shares of the restaurant operator’s stock valued at $3,392,000 after purchasing an additional 9,765 shares during the last quarter. 94.48% of the stock is currently owned by hedge funds and other institutional investors.

Cheesecake Factory News Summary

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

Cheesecake Factory Company Profile

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.