Jefferies Raises Price Target on Cheesecake Factory (CAKE), Raising Prices To Sustain Margins
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Price: $106.53 --0%
Rating Summary:
9 Buy, 27 Hold, 3 Sell
Rating Trend:
Down
Today's Overall Ratings:
Up: 8 | Down: 5 | New: 26
Rating Summary:
9 Buy, 27 Hold, 3 Sell
Rating Trend:
Down
Today's Overall Ratings:
Up: 8 | Down: 5 | New: 26
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Jefferies is reiterating its Hold rating on shares of Cheesecake Factory (NASDAQ: CAKE) while raising its price target from $27 to $30.
The company reported its Q2 results with EPS of $0.42, inline with the Street but two higher than the firms estimate. Jefferies notes that the two cent beat was due to a large buyback plan and a slightly lower tax rate than expected.
Same-store-sales for the quarter was 2.1 percent, ahead of the firm and below the consensus. Menu pricing in the quarter was up 1.4 percent and is expected to increase another 1.25 percent coming in August. As a result, Q3 effective price will be about 1.6 percent and 2 percent in Q4.
CAKE released its Q3 guidance with an EPS range of $0.36-$0.39 with comps expected to fall between 1.5 percent and 3 percent. Management claimed that higher food costs are the result of the lower estimates. To reflect the higher menu prices, the company increased its 2011 EPS guidance from $1.58-$1.70 to $1.62-$1.70 with SSS of 1.5 percent to 2.5 percent.
To go inline with the CAKES's new guidance and market trends, the firm its raising its 2011 and 2012 EPS estimates from $1.58 and $1.76 to $1.65 and $1.85.
For more ratings news on Cheesecake Factory click here and for the rating history of Cheesecake Factory click here.
Shares of Cheesecake Factory closed at $33.61 yesterday.
The company reported its Q2 results with EPS of $0.42, inline with the Street but two higher than the firms estimate. Jefferies notes that the two cent beat was due to a large buyback plan and a slightly lower tax rate than expected.
Same-store-sales for the quarter was 2.1 percent, ahead of the firm and below the consensus. Menu pricing in the quarter was up 1.4 percent and is expected to increase another 1.25 percent coming in August. As a result, Q3 effective price will be about 1.6 percent and 2 percent in Q4.
CAKE released its Q3 guidance with an EPS range of $0.36-$0.39 with comps expected to fall between 1.5 percent and 3 percent. Management claimed that higher food costs are the result of the lower estimates. To reflect the higher menu prices, the company increased its 2011 EPS guidance from $1.58-$1.70 to $1.62-$1.70 with SSS of 1.5 percent to 2.5 percent.
To go inline with the CAKES's new guidance and market trends, the firm its raising its 2011 and 2012 EPS estimates from $1.58 and $1.76 to $1.65 and $1.85.
For more ratings news on Cheesecake Factory click here and for the rating history of Cheesecake Factory click here.
Shares of Cheesecake Factory closed at $33.61 yesterday.
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