How sour has the market gotten for casual dining restaurants? So sour that Cheesecake Factory Inc.’s stock enjoyed a brief surge last week because of its plan to open fewer, yes, fewer, restaurants.

SunTrust Robinson Humphrey analyst Christopher O’Cull said in a research note to investors that the Calabasas-based restaurant chain’s plan to grow more slowly made the stock more attractive. O’Cull upgraded the stock from neutral to a buy, and the stock rallied on Monday in response, but then slid back. The closing price last Wednesday was $21.85, only slightly above its level before the call.

Cheesecake Factory in October announced that it would open 17 restaurants in 2008, which is four less than it will open this year.

“While fewer unit openings negatively impacts top-line growth, it benefits the margin by reducing the amount of pre-opening expense during the year, thus the company is targeting net income growth to outpace revenue during 2008,” O’Cull explained in his research note.

Other analysts had generally positive things to say about the company, and one even described it as “best in breed.” But they expressed concern about the overall weakness in the casual dinning sector.

“Cheesecake Factory is clearly a very healthy company and its concepts are well positioned; that is why we have it as an outperform,” said Howard Penney, an analyst at Friedman, Billings & Ramsey & Co. Inc. “Unfortunately, from a stock standpoint, it is hard to see how someone is going to make a lot of money because the casual dining industry is experiencing some of the weakest fundamentals I have seen in 15 years.”

Penney and other analysts have highlighted the inflationary pressures of food and labor costs, added with declines in discretionary consumer spending as key factors in their bleak outlook of casual dining companies.

“I don’t know any other restaurants pulling off a 200 item menu,” said analyst Greg Ruedy at Stephens Inc. “Cheesecake Factory’s shares are undervalued, but other restaurant stocks have been moving downwards and it is hard to expect one stock to get too far away from the rest of the pack.”

Cheesecake factory reported net income of $18.5 million in the third quarter, compared with $18.1 million in the same quarter last year. Revenue was $375 million, up 15 percent.