Cheesecake Factory Stock Crumbles After Q3 Results

Analysts are adjusting their price targets in response

Deputy Editor
Nov 2, 2022 at 10:53 AM
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Cheesecake Factory Inc (NASDAQ:CAKE) stock is dropping lower today after the company posted third-quarter losses of 3 cents per share on revenue of $784.00 million, which is lower than the estimated profits of 28 cents per share on $799.38 million. At last glance, CAKE was down 4.5% at $32.61. 

Analysts are chiming in with somewhat modest price-target adjustments after the event. So far, no fewer than three analysts have hiked their price targets, while two have issued bear notes. The largest adjustment is from Jefferies. The firm slashed its price objective by $6 to $40. Currently, six of the 13 in coverage carry a "buy" or better rating, with seven a "hold" or worse, and the 12-month consensus price target of $34.69 is a 6.2% premium to current levels. 

CAKE isn't typically all that popular amongst options traders, though the 513 puts across the tape so far today account for six times the intraday average volume. It's also worth pointing out that CAKE ranks low on the Schaeffer's Volatility Scorecard (SVS), with a score of just 9 out of 100. In other words, the security has consistently realized lower volatility than its options have priced in, making the stock a potential premium-selling candidate.

Year-to-date, Cheesecake Factory stock is down 16.2%, though it's been climbing off its summer lows at the $26 level. However, the security's October rally was cut short by overhead pressure at the 320-day moving average late last week. 

 

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