Following a Wall Street Journal article that reported activist investor JCP Investment Management had built a roughly 2% position in Cheesecake Factory (CAKE) and is advocating for the company to spin off its smaller brands into a separate, publicly traded company, Stephens analyst Jim Salera said the firm believes that a standalone publicly traded restaurant portfolio that included these high growth concepts “could certainly command a premium” to Cheesecake’s current multiple. However, the firm also believes the company “would not be quick to part with its growth engines,” considering that the concepts make up nearly 90% of Cheesecake’s new unit growth this year. The firm has an Overweight rating and $50 price target on Cheesecake Factory shares.
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