Argus’ John Staszak believes Darden Restaurants, Inc. DRI shares appear favorable, and the company is among the best managed casual dining companies in Argus’ coverage universe.
Staszak upgraded the rating on Darden Restaurants from Hold to Buy, with a price target of $88.
Better Results Expected
“We expect Darden to post better results than other casual-dining chains, and look for revenue and margins to benefit from management’s efforts to boost traffic and lower costs,” the analyst mentioned.
Staszak believes the company’s smaller brands, including Seasons 52, Yard House and Bahama Breeze, could help Darden Restaurants appeal to a broader range of customers, including millennials.
The company reported its Q2:17 results on December 20, with the EPS in line with the consensus at $0.64.
The analyst believes that “share buybacks, unit expansion, and further cost reductions will lead to EPS growth over time.”
The EPS estimate for FY 2017 has been raised from $3.96 to $4.00.
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