What Happened?
Shares of restaurant company Cheesecake Factory (NASDAQ: CAKE) jumped 3.3% in the afternoon session after Freedom Capital Markets initiated coverage on the company with a "Hold" rating and a $56 price target.
The new rating came from analyst Lynne Collier. While the "Hold" rating is neutral, the firm expressed its appreciation for The Cheesecake Factory's collection of premium dining brands, noting that its smaller growth brands were "underappreciated by the Street." The price target of $56 represented a potential upside from where shares were trading. Despite the positive view on the company's brands, Freedom Capital Markets cited broader economic challenges as a reason for its neutral stance on the stock.
After the initial pop the shares cooled down to $50.49, up 2.7% from previous close.
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What Is The Market Telling Us
The Cheesecake Factory’s shares are somewhat volatile and have had 12 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 7 months ago when the stock gained 6.1% on the news that the major indices rebounded (Nasdaq +2.0%, S&P 500 +1.5%) as President Trump postponed the planned 50% tariff on European Union imports, shifting the start date to July 9, 2025. Companies with substantial business ties to Europe likely had some relief as the delay reduced near-term cost pressures and preserved cross-border demand.
The Cheesecake Factory is up 4.1% since the beginning of the year, but at $50.49 per share, it is still trading 26.3% below its 52-week high of $68.51 from July 2025. Investors who bought $1,000 worth of The Cheesecake Factory’s shares 5 years ago would now be looking at an investment worth $1,355.
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