NEW YORK (AP) â¿¿ The Cheesecake Factory Inc.'s stock slid more than 5 percent on Monday as an analyst cut her rating on the shares as consumers again pull back on dining out.
THE SPARK: As they worried about the economy and high unemployment during the recession, consumers ate out less frequently. As economic conditions have improved, they have been patronizing restaurants again.
But Sharon Zackfia of William Blair & Co. said in a client note on Monday that her checks on restaurant operators showed uneven performances in May following weakness in April.
Not helping matters are government reports showing that U.S. employers added only 69,000 jobs in May, the fewest in a year, and the unemployment rate rose a percentage point to to 8.2 percent.THE ANALYSIS: Zackfia reduced her rating on The Cheesecake Factory to "Market Perform" from "Outperform." She believes the company can still meet its own forecast for full-year earnings of $1.83 to $1.91 per share. But she said she is worried the results will come in below her estimate for $1.88 per share. SHARE ACTION: Shares of The Cheesecake Factory fell $1.42, or 4.5 percent, to $29.93 by mid-afternoon. The stock has traded between $23.65 and $34.07 over the past year.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV