Overview
Citi raised its price target for Cheesecake Factory Inc. from $76 to $90, the highest target assigned by any Wall Street analyst to the restaurant operator, while maintaining a buy rating on the stock.
Market Reaction
Following the target increase, Cheesecake Factory shares climbed as much as 7% intraday on Friday, reaching an intraday record high for the day.
Analyst Commentary
Analyst Jon Tower, in a note to clients, said the company’s rewards program could be sufficient to drive traffic trends into positive territory. He highlighted a relevant and flexible menu, a more engaging social media strategy, growing relevance with younger consumers, and the resurgence of malls as additional positive drivers. Tower added that a firmer view of the SSS trajectory would warrant resetting the valuation range higher.
Outlook
Citi’s upgraded target and continued buy rating suggest an optimistic outlook for the chain, supported by the identified growth catalysts.