The analyst has a $60 price target on the shares, indicating a potential 16% increase from the stock's Friday closing price at $51.66.
Brinker International (EAT) - Get Report was also upgraded to outperform from market perform as the Dallas parent of Chili's Grill and Maggiano's Little Italy is also expected to benefit from an uptick in post-pandemic business.
Cheesecake Factory looks attractive ahead of what is likely to be a "very strong" second-quarter season for restaurant stocks in general, the analyst said.
A strong restaurant-sales recovery has continued through the second quarter and Vaccaro expects positive commentary from Cheesecake Factory on food inflation being manageable and progress on restaffing outlets. Retail and restaurants have had a hard time finding employees as the pandemic has eased.
Raymond James also expects balance-sheet improvements that are underappreciated, the analyst wrote. Many companies are now generating significant cash flow and paying down debt.
Cheesecake Factory shares at last check were 3.2% higher at $53.31. They'd touched a 52-week high $65.81 near the end of April.
Shares of Cheesecake Factory have risen more than 40% year to date after the company in December settled Securities and Exchange Commission charges that it made "misleading disclosures" about the effect of the coronavirus pandemic.
The SEC said the action against the Calabasas Hills, Calif., company was its first to charge a public company with misleading investors about the financial effects of the pandemic.
The company agreed to a $125,000 penalty without admitting or denying the SEC’s findings.
The SEC found that Cheesecake Factory failed to disclose that it had informed its landlords that it would not pay rent in April due to the pandemic’s impact on its business after previously stating that its restaurants were "operating sustainably," during the height of the pandemic.
Brinker International shares at last check were trading up 3.3% at $62.88.