UPDATE: BMO Capital Markets Initiates Coverage On Darden Restaurants

In a note dated October 9, BMO analyst Andrew Strezlik initiated coverage of Darden Restaurants, Inc. DRI at Market Perform with a $52 price target.

Strezlik commented, "We believe DRI's long-term earnings potential will be determined largely by its ability to drive a turnaround at Olive Garden."

He added, "The likely long timeline required for a turnaround in Olive Garden trends likely will pressure earnings toward the low end of Darden's FY2015 guidance, and we would not be surprised if Darden were to fall short of its expectations."

On the other hand, Strezlik is optimistic about the performance of Darden's LongHorn and Specialty Restaurant Group. He believes these businesses should continue to generate "solid" growth.

Looking ahead, Strezlik is forecasting an EPS of $2.23 and $2.47, respectively, for 2015 and 2016.