Cheesecake Factory (CAKE – Research Report), the Consumer Cyclical sector company, was revisited by a Wall Street analyst today. Analyst Brian Harbour from Morgan Stanley maintained a Sell rating on the stock and has a $40.00 price target.
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Brian Harbour has given his Sell rating due to a combination of factors surrounding the recent performance and future outlook of the Cheesecake Factory. The company’s fourth-quarter results showed stable business performance with revenue and margins exceeding expectations, leading to an EPS beat. However, the guidance for 2025 remains largely unchanged, with only slight improvements anticipated from unit openings, which poses a concern for sustaining future growth.
Despite some positive aspects, such as improved margins and better-than-expected results from certain brands, the overall sentiment is cautious. The mixed performance of different segments, with Cheesecake Factory slightly outperforming expectations but North Italia falling short, highlights inconsistencies. Additionally, the conservative guidance for 2025, particularly in terms of margin improvements, suggests limited upside potential. Harbour’s cautious view is further supported by the need for stronger brand performance and margin drivers to maintain stock momentum.
Harbour covers the Consumer Cyclical sector, focusing on stocks such as Brinker International, Chipotle, and Domino’s Pizza. According to TipRanks, Harbour has an average return of 0.1% and a 53.21% success rate on recommended stocks.
In another report released today, Barclays also maintained a Sell rating on the stock with a $50.00 price target.