Sterne Agee Maintains Buy, $52 Target on Darden Restaurants

Sterne Agee remains Buy-rated with a $52 target price on Darden Restaurant

following takeaways from investors/analyst day. Sterne Agee says, "Following the investor/analyst day on 2/24, our primary takeaway is that management remains confident in a turnaround at Olive Garden and indicated that the brand had seen sequentially improving SSS over the last 3 months. The Company also outlined its plan to return to double-digit earnings growth in FY13. We are maintaining our BUY rating based on the following: 1) Attractive valuation at 12.0x our FY13 EPS estimate, which is slightly below DRI's 5-yr avg. multiple of ~13x; 2) One of the highest dividends in the restaurant industry, at 3.5%; 3) Strong operating expertise; 4) Superior marketing capability; and 5) Significant free cash flow generation." DRI closed at $49.19 a share on Friday.