Sterne Agee Has Buy On The Cheesecake Factory Incorporated

Sterne Agee is out with a research report on The Cheesecake Factory Incorporated CAKE and it has a Buy rating on shares after it reported earnings last night. It has a $36 price target on shares. In a note to clients, Sterne Agee writes, "We are maintaining our BUY rating based on the following: 1) Differentiated brand with barriers to entry; 2) Positive same-store-sales (SSS) across all major markets; 3) Pricing power to offset higher commodity costs; 4) Significant LT growth opportunity from international; 5) FCF (yield of 5.2%) will be used to repurchase shares and we believe that CAKE could potentially initiate a dividend; and 6) We view the valuation as attractive as shares are trading at just 17.4x our FY12 estimate (below 5-year avg. multiple of 19x)." Shares of CAKE are down 92 cents to $31.77, a loss of 2.8%.