Cheesecake Factory weakness provides buying opportunity, says Argus

Argus keeps a Buy rating and $44 price target on Cheesecake Factory but notes that the recent relative weakness in the stock offers a buying opporutnity. The company’s Q2 restaurant operating margin of 17.7% was the highest level in the past six years, with the quarter also registering a record-high average weekly sales rate for its signature brand, the analyst tells investors in a research note. Argus adds that it is positive on Cheesecake Factory’s 7%-8% restaurant unit growth while noting the management’s confidence in opening 22 new locations in 2024, also noting that the company’s recent price hikes, improved labor productivity, and commitment to maintaining margins will lead to stronger earnings going forward.