Morgan Stanley (NYSE: MS) analyst raised their first quarter earnings per share and 2010 earnings per share estimates for The Cheesecake Factory (NASDAQ: CAKE) citing that the company is well positioned to be a competitive leader as the economy recovers
Morgan Stanley analysts John Glass and David Dorfman said, “Ahead of the 1Q (due April 22 AMC) we’re raising our 1Q est. to $0.28 from $0.26 (and vs. $0.23-$0.25 guidance and $0.25 consensus) and to $1.36 for FY10 from $1.25 (vs. $1.16-$1.24 guidance and $1.26 consensus). This is entirely driven by increased comps–we are raising our 1Q comp est. to +1.5% (vs. prior 0.5% and flat to +1% guidance) and to ~2% for FY10 (vs. prior -0.7% and -1% to flat guidance). Leveraging CAKE’s highly fixed cost structure, each point of comp is worth ~$0.08 annually. Along with PFCB ($45.91), CAKE is an attractive play on a higher-end consumer recovery with low execution risks. We are raising our base case to $30, 18x our 2011 EPS of $1.68.”
The analysts predict a 2011 earnings per share of $1.69, vs. consensus estimates of $1.45 per share.
