Cheesecake Factory's (CAKE) strong sales and traffic trends are expected to continue into Q4, though there are risks to the sustainability of recent momentum in 2027 amid tougher comparisons and a higher valuation, UBS said in a note Wednesday.
The company's Q3 comparable sales growth of 15.2% was driven by menu innovation, marketing, operational improvements and social media engagement, UBS said.
Cheesecake Factory reported Q3 adjusted earnings late Tuesday of $1.02 per diluted share on revenue of $1.03 billion, compared with FactSet estimate of $0.96 and $1 billion, respectively.
The brokerage expects momentum to persist into early 2027 but said investor focus is likely to shift toward the durability of traffic gains as comparisons become more challenging and the contribution from viral social media content potentially eases.
The company is targeting about 10% comparable restaurant sales for Q4, while UBS models 12% growth, according to the note. The firm said it sees 4.1% comparable restaurant sales for 2027.
UBS maintained a sell rating on the stock with $80 price target.
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