5 Restaurant Stocks at 52-Week Highs

NEW YORK ( TheStreet) -- A handful of stocks in the restaurant sector tapped 52-week highs on Monday.

Shares of Chipotle Mexican Grill ( CMG), Cheesecake Factory ( CAKE), Texas Roadhouse ( TXRH), Panera Bread ( PNRA) and Tim Hortons ( THI) all hit annual heights during the day's volatile trading session.

>>Restaurant Stocks: Earnings to Watch

The PowerShares Dynamic Leisure and Entertainment Portfolio ( PEJ) and PowerShares Dynamic Consumer Discretionary Sector Portfolio ( PEZ), exchange-traded funds that count Chipotle, Cheesecake, Panera and Texas Roadhouse among their holdings, closed the day in positive territory after spending much of the morning slightly down. The PEJ closed up by 0.8% while the PEZ added 0.9%.

>>Restaurant Stocks: Winners & Losers

Shares of Chipotle pushed up to a 52-week high of $243.98, closing just off that high at $242.92.

The fast-casual Mexican food chain handily beat expectations and reported a 39.9% rise in earnings for the third quarter , thanks in large part to an 11.4% jump in comparable same-store sales, or sales at stores open at least one year -- a closely watched metric in the restaurant industry.

RBC Capital Markets maintained a sector perform rating on Chipotle shares following its stellar earnings report, and raised its price target to $185. Stifel Nicolaus analyst Steve West maintained his buy rating, and upped his price target to $215, from $183.69.

Cheesecake Factory shares reached an annual high of $31.53 on Monday. The restaurant chain beat expectations for the recent quarter, primarily driven by comps growth of 2.8%.

Earnings increased 35% to $22 million, or 37 cents per share. Revenue grew 4.4% to $418.4 million.

Sterne Agee analyst Lynne Collier maintained a neutral rating on Cheesecake shares following its report, but raised her earnings expectations for the company.

Analysts from JPMorgan issued an upgrade on Cheesecake's stock to neutral from underweight, with a price target of $29.

Piper Jaffray maintained an underweight rating on the stock, but raised its earnings estimates and price target. The analysts set a price target of $25. "While we do not expect the fourth quarter of 2010 to be trending materially higher, we have tweaked up our same-store sales estimates in the fourth quarter of 2010 to account for improving restaurant-level sales," the firm noted.

Texas Roadhouse shares tapped a fresh 52-week high of $16.50 on Monday.

A competitor of Cheesecake Factory in the casual dining space, Texas Roadhouse posted an 8% jump in revenue in the recent quarter to $245.6 million.

Net income jumped 30% to just under $14 million, or 19 cents per share.

Comps grew 4.3% at company-operated restaurants and 4.4% at franchised locations.

Texas Roadhouse also said comps in the first four weeks of the current quarter grew 3.5% year-over-year. It forecast 2010 diluted earnings per share growth to be around 20% higher than in 2009, at the high-end of its previously announced outlook for growth in the 16% to 20% range.

The revised estimate was based on guidance for comps growth of 2% and 14 new restaurant openings in the year.

Panera Bread shares gained to a new annual high of $99.14, before closing the session at $98.06.

Panera posted third-quarter earnings of $23 million , or 75 cents per share, in line with expectations, but top-line sales of $372 million came in just shy of analysts' consensus call. Quarterly profits jumped 21.1% year-over-year.

Still, the sandwich and salad purveyor was optimistic. Panera raised its earnings guidance for the current quarter, saying it now expects to earn between $1.15 and $1.17 per share in the fourth quarter. That's as much as a nickel past Wall Street's expectations for fourth-quarter earnings of $1.13 per share.

"We're coming right through this recession as strong as ever," Executive Chairman Ronald M. Shaich told TheStreet.

Panera reported that system-wide comps grew 6.9% in the recent quarter, including a 5.5% increase at company-owned stores and a 7.9% increase at franchise-operated locations.

For fiscal 2011 Panera expects sales to grow between 4% and 6%, partly due to "modest price increases of approximately 1.5% during fiscal 2011 to cover inflation."

"We remain encouraged by the company's SSS trends and believe the increasing operating margins and solid growth pipeline remain all the more impressive," noted Piper Jaffray.

Shares of Canadian coffee shop chain Tim Hortons brewed a fresh 52-week high of $40.09 on Monday, before closing the day at $39.71.

Tim Hortons booked a 9.8% jump in revenue and a 20.6% surge in profits, year-over-year, for the recent quarter.

Analysts from Morgan Joseph initiated coverage of Tim Hortons in late September, giving the stock a buy rating.

Despite strong sales and earnings growth, Tim Hortons said it plans to close 36 underperforming stores before the end of 2010, 34 of which are in the Providence and Hartford markets, as it works to "reinvest in our core growth markets in the Northeast and Midwest U.S. where the brand continues to demonstrate strengthening average unit volumes, cash flows and brand progression."

Hortons said same-store sales rose 4.3% in Canada and 3.3% in the U.S last quarter.

Hortons' overall sales results beat expectations for revenue of $657.3 million, but profits came up short. Excluding the asset impairment charge, earnings per share would have been 54 cents, a penny ahead of expectations.

-- Written by Miriam Marcus Reimer in New York.

>To contact the writer of this article, click here: Miriam Reimer.

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