Reuters: Global Markets: Tim Hortons down, Cheesecake Factory up on ratings changes

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Tim Hortons down, Cheesecake Factory up on ratings changes Jul 16th 2012, 14:31 TORONTO | Mon Jul 16, 2012 10:31am EDT TORONTO (Reuters) - Shares of Canada's Tim Hortons Inc (THI.TO) fell and Cheesecake Factory Inc (CAKE.O) rose on Monday after Goldman Sachs downgraded its rating on Tim Hortons to "sell" and upgraded Cheesecake Factory to "neutral." In a note to clients, analyst Michael Kelter said that despite steady same-store sales gains at Tim Hortons, he is concerned with declines in restaurant traffic at the chain, best known for its coffee and doughnuts. "These declines may be an early indicator of impending saturation in its home Canadian market and/or may reflect increased competitive pressures," he wrote. Tim Hortons and U.S. heavyweight McDonald's Corp (MCD.N) are increasingly competing head-to-head in Canada, as Tims expands food offerings and McDonald's promotes its coffee. In the same note, Kelter upgraded Cheesecake Factory Inc (CAKE.O) to "neutral" from "sell." He said the restaurant chain's same-store sale trend has held up better than its peers, and that earnings may be boosted by lower food costs. Tim Hortons' stock was down 2.9 percent at C$52.15 in early trading on the Toronto Stock Exchange on Monday. Cheesecake Factory rose 2.3 percent to $32.61 on the Nasdaq.

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