UPDATE: Goldman Sachs Starts Cheesecake Factory (CAKE) at Sell

Goldman Sachs initiated coverage on Cheesecake Factory (NASDAQ: CAKE) with a Sell rating and a price target of $51. Analyst Karen Holthouse said its higher-income customer base limits upside in a recovery scenario.

Holthouse explained, "Capacity constraints (e.g., units on long waits at peak hours) and less lower-income exposure make CAKE less leveraged to the expected acceleration in casual dining trends. We are not making a call for a comp miss, but merely relative underperformance versus concepts with comp upside. We also see commodities (e.g., butter prices), G&A, and the AUV (average unit volume) drag of opening smaller units presenting risks to consensus estimates when shares have historically been sensitive to estimate revisions. Our 2015-2017 EPS estimates are an average of 5.2% below consensus estimates."

For an analyst ratings summary and ratings history on Cheesecake Factory click here. For more ratings news on Cheesecake Factory click here.

Shares of Cheesecake Factory closed at $54.54 yesterday.

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