UPDATE: JP Morgan Maintains Overweight, Lowers PT to $51 on Darden Restaurants
JP Morgan reiterates its Overweight rating on Darden Restaurants (NYSE: DRI) and lowers its price target to $51 from $53 per share as earnings visibility remains low.
JP Morgan notes, "DRI reported F2Q12 (Nov) EPS of $0.41 (-24% y/y) as preannounced on December 6th. Versus our estimate, lower restaurant margins ($0.03) driven by 40bps higher other opex were offset by lower G&A ($0.01), shares ($0.01), and tax rate ($0.01). Commodities drove profit declines at all three major brands, despite 6%+ comps at both Red Lobster and LongHorn and obviously at Olive Garden with -2.5% comps. ...We maintain our 10% y/y growth in 2H EPS and overall EPS of $3.45 vs. $3.55 to $3.65 guidance in F12."
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