Shares of Darden Restaurants, Inc. DRI rose slightly on Monday trading, in anticipation of the announcement of the company’s fourth quarter financial results, to be reported on Tuesday, before the market open.
According to Estimize, the restaurant operator is expected to deliver year-over-year earnings growth of approximately 10 percent despite declining sales.
In the fourth quarter of 2014, the company reported earnings of $0.84 per share on revenue of $2.32 billion. For this year’s fourth quarter, management guided earnings of $0.93 per share; Wall Street analysts are modeling earnings of $0.94 per share (on revenue of $1.872 billion); and the crowd is projecting earnings of $0.92 per share (on sales of $1.875 billion).
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A second chart, featured below, shows how sentiment has evolved over time.
Estimates for Darden have seen several increases over the quarter and now stand at their highest point.
‘Structural Upside Rolls Into View’
In a recent research note, Credit Suisse analyst Jason West upgraded his rating for Darden’s stock, from Neutral to Outperform, while raising the price target from $69 to $77.
Related Link: Credit Suisse Upgrades Darden Restaurants, Says 'Structural Upside Rolls Into View'
The expert believes the company is poised for significant EPS growth, as it implements "wide-ranging improvements in operations, the cost structure, and capital efficiency."
His "potential bull-case" implies earnings reaching roughly $4.60 by FY17, about 40 percent higher than the current consensus.
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