3 of 4 Darden Restaurants Analysts See Investors Feasting On Q3 Print

Zinger Key Points
  • Darden Restaurants earnings were driven by upbeat same store sales, one analyst said.
  • The company’s EBIT margins expanded for the first time in four quarter, another analyst stated.

Darden Restaurants, Inc. DRI Thursday reported an earnings beat for its fiscal third quarter.

Wedbush On Darden Restaurants

Analyst Nick Setyan maintained an Outperform rating and price target of $165.

Darden Restaurants reported an earnings beat on better-than-expected same store sales growth, Setyan said in a note. He added that the midpoint of the company’s raised guidance may “prove conservative once again.”

“We expect DRI's category share gains to accelerate in an increasingly uncertain consumer environment, rendering visibility into DRI's ability to achieve or exceed current consensus FY23 expectations relatively high,” the analyst stated.

Oppenheimer On Darden Restaurants

Analyst Brian Bittner reiterated an Outperform rating and price target of $175.

“Importantly, EBIT margins have also begun expanding for the first time in four quarters, a theme we anticipate to continue,” Bittner wrote in a note. He added that the guidance “remains intentionally conservative.”

“We continue to see drivers of EPS upside through '24E,” the analyst further said.

Check out other analyst stock ratings.

Raymond James On Darden Restaurants

Analyst Brian Vaccaro reaffirmed an Outperform rating, while raising the price target from $160 to $165.

The latest results reflect better-than-expected comps and traffic share gains as well as “emerging margin tailwinds as menu pricing finally catches up to moderating inflation dynamics,” Vaccaro said.

“While DRI could take a breather as investors assess broader industry trends over the next couple of critical months, we believe the company is well positioned to navigate a less certain macro backdrop given its strong brand portfolio (high AUVs & margins), best-in-class operators, and ironclad B/S and strong FCF profile,” the analyst further stated.

BMO Capital Markets On Darden Restaurants

Analyst Andrew Strelzik maintained a Market Perform rating, while raising the price target from $145 to $150.

“DRI’s strategic focus on everyday value and service levels continues to drive demand trends ahead of the industry,” Strelzik said in a note. “A number of potential risks to the sales outlook likely will remain an overhang to casual dining sentiment,” he added.

“As it stands, the FY24 environment doesn't strike us as one particularly conducive to material margin expansion,” the analyst further wrote.

DRI Price Action: Shares of Darden Restaurants were up 0.88% to $151.84 at the time of publication Friday.

Photo: Unsplash


Analyst Ratings




Posted In: Analyst ColorEarningsNewsPrice TargetReiterationAnalyst RatingsAndrew StrelzikBMO Capital MarketsBrian BittnerBrian VaccaroExpert IdeasNick SetyanOppenheimerRaymond JamesWedbush