UPDATE: Raymond James Upgrades Darden Restaurants on Favorable Risk-Reward After Pullback

In a report published Tuesday, Raymond James analyst Bryan C. Elliott upgraded the rating on

from Market Perform to Outperform, and named a $55.00 price target. In the report, Raymond James noted, “We are upgrading DRI to Outperform from Market Perform and initiating a 12-month price target of $55. DRI has retraced nearly all of its gain (and is down ~10% YTD) since the first of two current activists emerged in early October (Barington Capital, over 2% position; Starboard Value filed 5.5% position in late December). "More recently, both activists have publicly 1) expressed their concerns regarding management's plan to spin off or sell Red Lobster prior to monetizing its real estate assets, and 2) stated that they may take additional actions if management does not reconsider its plan (Barington proposed splitting Chairman and CEO roles, Starboard may seek to replace a majority of the company's Board). We believe this increases the probability that a more substantive restructuring event could be announced, which could push the stock back at least toward its recent highs. With downside limited by the stock's industry-high 4.6% dividend yield, we believe the stock has a favorable near-term risk-reward from current levels despite our view that there is not material ‘hidden value' to unlock via a restructuring.” Darden Restaurants closed on Friday at $48.38.