Darden Restaurants' Portfolio Is Better Positioned Than Most, Says This Analyst - Darden Restaurants (NYSE:DRI)

KeyBanc analyst Eric Gonzalez reiterated an Overweight rating on the shares of Darden Restaurants Inc DRI and raised the price target to $150 from $136.
The analyst believes the company's portfolio is better positioned than most, having preserved affordability and leaned heavily into productivity over the last two years.
Gonzalez added that Darden's scale, data insights, strategic planning, and results-oriented culture should enable it to outperform through various economic cycles.
Also Read: Darden Restaurants Reports Q1 Revenue Below Street View; Backs FY23 Outlook
The return of Darden's Never-Ending Pasta Bowl (NEPB) at Olive Garden is intended to be a natural progression of the company's messaging, which initially highlighted the Never-Ending first course and, more recently, its sauces.
NEPB, Gonzalez says, is the evolution of this campaign and is being executed during the seasonally low-volume period allowing the brand to keep its restaurants fully staffed as it approaches the higher-volume holiday periods.
He cited that the pandemic allowed Olive Garden to shed less profitable guests and reinvest in its food/service to create a more sustainable competitive advantage.
By underpricing the inflation curve as costs surged, Olive Garden should be less likely to revert to pre-pandemic habits even as its peers increasingly look to do so, noted the analyst.
Also See: This Type Of Restaurant Is Thriving Right Now, Yet Olive Garden Struggles: Here's Why
Price Action: DRI shares are trading lower by 2.19% at $130.19 on the last check Thursday.
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