Stephens Reiterates Equal Weight Rating for Darden Restaurants (NYSE:DRI)

Key Points

• Stephens reaffirmed its “equal weight” rating on Darden Restaurants, with a $220 price target implying 6.37% upside. Overall, analysts maintain a “Moderate Buy” consensus and an average target of $232.52.
• Darden’s fiscal Q1 2027 revenue rose 5.1% year over year to $3.20 billion, while EPS of $2.05 matched expectations; management reaffirmed full-year adjusted EPS guidance of $11.10–$11.35.
• Despite solid sales growth, profitability and brand momentum showed pressure: net income declined amid higher food and labor costs, revenue slightly missed estimates, and Olive Garden same-store sales growth slowed to 1.1%.

Darden Restaurants (NYSE:DRI - Get Free Report)'s stock had its "equal weight" rating restated by analysts at Stephens in a note issued to investors on Friday, Benzinga reports. They presently have a $220.00 target price on the restaurant operator's stock. Stephens' target price would indicate a potential upside of 6.37% from the company's previous close.

Several other research analysts have also commented on DRI. TD Cowen reaffirmed a "hold" rating and set a $215.00 price target on shares of Darden Restaurants in a research report on Thursday. Bank of America lifted their price target on Darden Restaurants from $272.00 to $276.00 and gave the stock a "buy" rating in a research report on Friday, June 5th. Deutsche Bank Aktiengesellschaft lifted their price target on Darden Restaurants from $230.00 to $236.00 and gave the stock a "buy" rating in a research report on Friday, June 26th. Argus lifted their price target on Darden Restaurants from $240.00 to $245.00 and gave the stock a "buy" rating in a research report on Tuesday, June 30th. Finally, Morgan Stanley lifted their target price on Darden Restaurants from $236.00 to $255.00 and gave the company an "overweight" rating in a research note on Monday, September 14th. Eighteen investment analysts have rated the stock with a Buy rating and nine have assigned a Hold rating to the company's stock. According to data from MarketBeat, Darden Restaurants has a consensus rating of "Moderate Buy" and an average price target of $232.52.

Darden Restaurants Stock Performance

Shares of DRI opened at $206.83 on Friday. The company has a debt-to-equity ratio of 0.74, a quick ratio of 0.21 and a current ratio of 0.31. Darden Restaurants has a 1 year low of $169.00 and a 1 year high of $229.76. The stock has a market capitalization of $23.60 billion, a PE ratio of 19.93, a PEG ratio of 2.01 and a beta of 0.60. The stock has a 50-day simple moving average of $212.01 and a 200-day simple moving average of $204.76.

Darden Restaurants (NYSE:DRI - Get Free Report) last issued its earnings results on Thursday, September 24th. The restaurant operator reported $2.05 earnings per share for the quarter, hitting the consensus estimate of $2.05. Darden Restaurants had a return on equity of 57.44% and a net margin of 9.13%.The business had revenue of $3.20 billion for the quarter, compared to analyst estimates of $3.21 billion. During the same quarter last year, the company earned $1.97 EPS. The business's quarterly revenue was up 5.1% on a year-over-year basis. Darden Restaurants has set its FY 2027 guidance at 11.100-11.350 EPS. On average, analysts predict that Darden Restaurants will post 11.26 earnings per share for the current fiscal year.

Insider Transactions at Darden Restaurants

In other Darden Restaurants news, insider Laura Williamson sold 443 shares of the business's stock in a transaction on Friday, July 31st. The stock was sold at an average price of $204.89, for a total transaction of $90,766.27. Following the sale, the insider directly owned 5,536 shares in the company, valued at approximately $1,134,271.04. The trade was a 7.41% decrease in their ownership of the stock. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which can be accessed through this link. Also, CFO Rajesh Vennam sold 8,478 shares of the business's stock in a transaction on Wednesday, July 29th. The stock was sold at an average price of $210.00, for a total value of $1,780,380.00. Following the sale, the chief financial officer owned 8,569 shares in the company, valued at approximately $1,799,490. The trade was a 49.73% decrease in their ownership of the stock. Additional details regarding this sale are available in the official SEC disclosure. Over the last 90 days, insiders sold 70,185 shares of company stock valued at $14,636,984. 0.67% of the stock is owned by company insiders.

Hedge Funds Weigh In On Darden Restaurants

Institutional investors have recently made changes to their positions in the stock. Bell Investment Advisors Inc acquired a new position in shares of Darden Restaurants in the second quarter worth $28,000. Union Savings Bank acquired a new position in Darden Restaurants in the fourth quarter valued at $28,000. Transamerica Financial Advisors LLC acquired a new position in Darden Restaurants in the second quarter valued at $34,000. HHM Wealth Advisors LLC increased its stake in Darden Restaurants by 44.8% during the first quarter. HHM Wealth Advisors LLC now owns 181 shares of the restaurant operator's stock worth $35,000 after acquiring an additional 56 shares during the last quarter. Finally, Keating Financial Advisory Services Inc. acquired a new stake in Darden Restaurants during the second quarter worth about $39,000. 93.64% of the stock is owned by institutional investors and hedge funds.

Key Darden Restaurants News

Here are the key news stories impacting Darden Restaurants this week:

• Positive Sentiment: Darden reported fiscal Q1 2027 revenue of approximately $3.20 billion, up 5.1% year over year, while adjusted earnings of $2.05 per share were broadly in line with expectations. Same-restaurant sales rose 3.1% across the portfolio. Darden fiscal 2027 first-quarter results
• Positive Sentiment: Management reaffirmed fiscal 2027 adjusted EPS guidance of $11.10 to $11.35, close to the analyst consensus of $11.28, reducing the risk of a broader outlook reset. Darden also said Yard House plans to open 13 locations. Darden reaffirms fiscal 2027 guidance
• Positive Sentiment: The board declared a quarterly dividend of $1.62 per share, or $6.48 annualized, representing a yield of about 3.1%. Shareholders also backed the existing board and governance structure at the annual meeting. Darden shareholder meeting results
• Neutral Sentiment: LongHorn Steakhouse remained a relative bright spot, posting 6.2% same-store sales growth, while management continues to benefit from sales growth across its restaurant segments.
• Negative Sentiment: Revenue fell short of the roughly $3.21 billion consensus estimate, and higher food and labor costs pressured profits. Reported net income declined to about $233 million from $258 million a year earlier. Darden profit declines on higher expenses
• Negative Sentiment: Olive Garden’s same-store sales growth slowed to 1.1%, raising concerns about consumer traffic and the durability of growth at Darden’s flagship brand. The combination of the revenue miss, weaker Olive Garden momentum and margin pressure is driving the negative investor reaction despite the reaffirmed outlook. Darden stock falls as Olive Garden growth slows

About Darden Restaurants

Darden Restaurants, Inc NYSE: DRI is a full-service restaurant company headquartered in Orlando, Florida. It operates and franchises a portfolio of dining brands serving a range of cuisines, price points and occasions, with restaurants primarily located in the United States and select international markets.

Its restaurant portfolio includes Olive Garden, an Italian-American dining chain; LongHorn Steakhouse; Cheddar's Scratch Kitchen; Yard House; The Capital Grille; Seasons 52; Bahama Breeze; Eddie V's; Ruth's Chris Steak House; and Chuy's.