The Cheesecake Factory ( NASDAQ: CAKE ) fell in early trading on Monday after Goldman Sachs downgraded the restaurant stock to a Sell rating from Neutral on fears traffic declines could worsen due to the economy.
Analyst Jared Garber and team see macroeconomic pressure in FY23 across the casual dining space with limited pricing power support and cost pressures remaining a headwind for margins.
Crucially, CAKE is expected to have a harder time passing on inflation costs through next year, while little relief for labor costs is seen for the chain.
The new price target on CAKE from Goldman Sachs is $29, which reflects downside of more than 10%.
Cheesecake Factory ( CAKE ) fell 3.06% in premarket action on Monday to $32.02 vs. the 52-week trading range of $26.05 to $44.65.
The Seeking Alpha Quant Rating on CAKE is Hold.
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Cheesecake Factory stock is lower after Goldman Sachs cuts it to a Sell rating