Darden Restaurants (DRI) – Analysts’ Recent Ratings Updates

A number of research firms have changed their ratings and price targets for Darden Restaurants (NYSE: DRI):

  • 5/13/2019 – Darden Restaurants was downgraded by analysts at Zacks Investment Research from a “buy” rating to a “hold” rating. According to Zacks, “Shares of Darden have outperformed the industry in a year. Darden’s earnings met/surpassed the Zacks Consensus Estimate for 18 straight quarters. Estimates for current quarter and year have increased over the past 60 days. Backed by its various sales initiatives and technology-driven moves, the top line is likely to improve in the months ahead. The company’s efforts to check costs are commendable. In fiscal 2018, management realized roughly $10 million of cost synergies and expects to realize the same in the range of $22-$27 million by the end of fiscal 2019. Further, the Cheddar's buyout has added value to Darden's portfolio of differentiated brands. Current-year earnings estimates have also moved north over the past month. However, fierce competition and softer-than-expected consumer demand might keep comps under pressure. Also, rising labor costs and a non-franchised business model may dampen profits.”
  • 5/9/2019 – Darden Restaurants was upgraded by analysts at Zacks Investment Research from a “hold” rating to a “buy” rating. They now have a $133.00 price target on the stock. According to Zacks, “Shares of Darden have outperformed the industry in a year. Darden’s earnings met/surpassed the Zacks Consensus Estimate for 18 straight quarters. Estimates for current quarter and year have increased over the past 60 days. Backed by its various sales initiatives and technology-driven moves, the top line is likely to improve in the months ahead. The company’s efforts to check costs are commendable. In fiscal 2018, management realized roughly $10 million of cost synergies and expects to realize the same in the range of $22-$27 million by the end of fiscal 2019. Further, the Cheddar's buyout has added value to Darden's portfolio of differentiated brands. Current-year earnings estimates have also moved north over the past month. However, fierce competition and softer-than-expected consumer demand might keep comps under pressure. Also, rising labor costs and a non-franchised business model may dampen profits.”
  • 5/7/2019 – Darden Restaurants was downgraded by analysts at Zacks Investment Research from a “buy” rating to a “hold” rating. According to Zacks, “Shares of Darden have outperformed the S&P 500 in a year. Darden’s earnings met/surpassed the Zacks Consensus Estimate for 18 straight quarters. Estimates for current quarter and year have increased over the past 60 days. Backed by its various sales initiatives and technology-driven moves, the top line is likely to improve in the months ahead. The company’s efforts to check costs are commendable. In fiscal 2018, management realized roughly $10 million of cost synergies and expects to realize the same in the range of $22-$27 million by the end of fiscal 2019. Further, the Cheddar's buyout has added value to Darden's portfolio of differentiated brands. Current-year earnings estimates have also moved north over the past month. However, fierce competition and softer-than-expected consumer demand might keep comps under pressure. Also, rising labor costs and a non-franchised business model may dampen profits.”
  • 4/26/2019 – Darden Restaurants is now covered by analysts at UBS Group AG. They set a “buy” rating and a $133.00 price target on the stock.
  • 4/3/2019 – Darden Restaurants had its price target raised by analysts at Citigroup Inc from $120.00 to $146.00. They now have a “buy” rating on the stock.
  • 3/22/2019 – Darden Restaurants had its price target raised by analysts at Wells Fargo & Co from $110.00 to $120.00. They now have a “market perform” rating on the stock.
  • 3/22/2019 – Darden Restaurants had its price target raised by analysts at Morgan Stanley from $112.00 to $121.00. They now have an “equal weight” rating on the stock.
  • 3/22/2019 – Darden Restaurants was given a new $130.00 price target on by analysts at Bank of America Corp. They now have a “buy” rating on the stock.
  • 3/22/2019 – Darden Restaurants had its price target raised by analysts at Loop Capital to $140.00. They now have a “buy” rating on the stock.
  • 3/22/2019 – Darden Restaurants had its price target raised by analysts at SunTrust Banks, Inc. to $141.00. They now have a “buy” rating on the stock.
  • 3/22/2019 – Darden Restaurants had its price target raised by analysts at BTIG Research to $134.00. They now have a “buy” rating on the stock.
  • 3/22/2019 – Darden Restaurants had its price target raised by analysts at Mizuho from $125.00 to $130.00. They now have a “buy” rating on the stock.
  • 3/21/2019 – Darden Restaurants was upgraded by analysts at Gordon Haskett from an “underperform” rating to a “hold” rating.
  • 3/19/2019 – Darden Restaurants had its “buy” rating reaffirmed by analysts at Maxim Group. They now have a $128.00 price target on the stock. They wrote, “We maintain our Buy rating on Darden Restaurants (DRI) and raise our price target to $128, from $122, ahead of the release of F3Q19 (February) results on Thursday, March 21 before the open.””

Shares of NYSE:DRI traded up $0.93 during trading on Friday, reaching $119.88. The company’s stock had a trading volume of 99,798 shares, compared to its average volume of 1,190,113. The company has a current ratio of 0.48, a quick ratio of 0.33 and a debt-to-equity ratio of 0.40. Darden Restaurants, Inc. has a 12 month low of $84.37 and a 12 month high of $124.00. The company has a market cap of $14.88 billion, a price-to-earnings ratio of 24.92, a PEG ratio of 2.04 and a beta of 0.29.

Darden Restaurants (NYSE:DRI) last announced its quarterly earnings results on Thursday, March 21st. The restaurant operator reported $1.80 EPS for the quarter, beating the Zacks’ consensus estimate of $1.75 by $0.05. Darden Restaurants had a net margin of 8.08% and a return on equity of 30.28%. The firm had revenue of $2.25 billion during the quarter, compared to the consensus estimate of $2.24 billion. During the same quarter last year, the firm earned $1.71 EPS. The firm’s revenue for the quarter was up 5.5% compared to the same quarter last year. As a group, equities analysts forecast that Darden Restaurants, Inc. will post 5.78 EPS for the current year.

The firm also recently disclosed a quarterly dividend, which was paid on Wednesday, May 1st. Stockholders of record on Wednesday, April 10th were issued a dividend of $0.75 per share. This represents a $3.00 annualized dividend and a dividend yield of 2.50%. The ex-dividend date was Tuesday, April 9th. Darden Restaurants’s dividend payout ratio (DPR) is presently 62.37%.

In other news, insider Eugene I. Lee, Jr. sold 73,152 shares of the stock in a transaction dated Monday, March 25th. The stock was sold at an average price of $118.61, for a total value of $8,676,558.72. Following the completion of the sale, the insider now owns 190,025 shares of the company’s stock, valued at $22,538,865.25. The sale was disclosed in a legal filing with the SEC, which is available at this link. Also, SVP John W. Madonna sold 330 shares of the stock in a transaction dated Monday, March 25th. The shares were sold at an average price of $118.76, for a total value of $39,190.80. Following the completion of the sale, the senior vice president now directly owns 1,680 shares of the company’s stock, valued at approximately $199,516.80. The disclosure for this sale can be found here. Insiders own 0.65% of the company’s stock.

Several hedge funds have recently modified their holdings of the company. BlueMountain Capital Management LLC purchased a new stake in Darden Restaurants in the first quarter worth $12,723,000. Covenant Partners LLC purchased a new position in shares of Darden Restaurants in the first quarter valued at $210,000. HighTower Advisors LLC grew its position in shares of Darden Restaurants by 7.4% in the first quarter. HighTower Advisors LLC now owns 19,267 shares of the restaurant operator’s stock valued at $2,340,000 after purchasing an additional 1,325 shares in the last quarter. Baker Avenue Asset Management LP purchased a new position in shares of Darden Restaurants in the first quarter valued at $1,707,000. Finally, Ladenburg Thalmann Financial Services Inc. grew its position in shares of Darden Restaurants by 20.4% in the first quarter. Ladenburg Thalmann Financial Services Inc. now owns 11,461 shares of the restaurant operator’s stock valued at $1,391,000 after purchasing an additional 1,938 shares in the last quarter. 91.35% of the stock is owned by institutional investors.

Darden Restaurants, Inc, through its subsidiaries, owns and operates full-service restaurants in the United States and Canada. As of May 27, 2018, it owned and operated approximately 1,746 restaurants under the Olive Garden, LongHorn Steakhouse, Cheddar's Scratch Kitchen, Yard House, The Capital Grille, Bahama Breeze, Seasons 52, and Eddie V's brands.

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