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

Key Points

• Darden Restaurants' stock has been given an "equal weight" rating by Stephens, with a target price of $215.00, indicating a potential upside of 14.79% from its previous close.
• The company reported $1.97 earnings per share for the last quarter, missing estimates by ($0.04), while its revenue increased 10.4% year-over-year to $3.04 billion.
• Darden's Board has authorized a $1 billion stock repurchase program, suggesting management believes the shares are currently undervalued.

Darden Restaurants (NYSE:DRI - Get Free Report)'s stock had its "equal weight" rating reiterated by equities research analysts at Stephens in a note issued to investors on Thursday,Benzinga reports. They presently have a $215.00 price objective on the restaurant operator's stock. Stephens' price target suggests a potential upside of 16.32% from the stock's previous close.

Several other brokerages also recently commented on DRI. Bank of America upped their price target on shares of Darden Restaurants from $253.00 to $254.00 and gave the company a "buy" rating in a research report on Tuesday. UBS Group upped their price target on shares of Darden Restaurants from $225.00 to $245.00 and gave the company a "buy" rating in a research report on Monday, June 16th. Barclays upped their price target on shares of Darden Restaurants from $235.00 to $255.00 and gave the company an "overweight" rating in a research report on Monday, June 23rd. TD Cowen restated a "hold" rating and issued a $235.00 price target on shares of Darden Restaurants in a research report on Thursday. Finally, Wall Street Zen downgraded shares of Darden Restaurants from a "buy" rating to a "hold" rating in a research report on Friday, June 27th. Eighteen research analysts have rated the stock with a Buy rating and eleven have assigned a Hold rating to the company's stock. Based on data from MarketBeat, the company currently has an average rating of "Moderate Buy" and an average target price of $224.21.

Darden Restaurants Price Performance

NYSE:DRI traded down $7.91 during trading hours on Thursday, reaching $184.83. 3,334,483 shares of the company's stock were exchanged, compared to its average volume of 1,189,895. The company has a market capitalization of $21.55 billion, a P/E ratio of 19.81, a price-to-earnings-growth ratio of 1.77 and a beta of 0.71. Darden Restaurants has a 12 month low of $155.18 and a 12 month high of $228.27. The company has a quick ratio of 0.28, a current ratio of 0.40 and a debt-to-equity ratio of 0.96. The business's 50-day simple moving average is $206.37 and its two-hundred day simple moving average is $206.07.

Darden Restaurants (NYSE:DRI - Get Free Report) last issued its earnings results on Thursday, September 18th. The restaurant operator reported $1.97 earnings per share for the quarter, missing analysts' consensus estimates of $2.01 by ($0.04). The business had revenue of $3.04 billion for the quarter, compared to the consensus estimate of $3.03 billion. Darden Restaurants had a return on equity of 52.35% and a net margin of 8.90%.The company's quarterly revenue was up 10.4% on a year-over-year basis. During the same quarter in the previous year, the business posted $1.75 earnings per share. Darden Restaurants has set its FY 2026 guidance at 10.500-10.700 EPS. Sell-side analysts expect that Darden Restaurants will post 9.52 EPS for the current fiscal year.

Darden Restaurants announced that its board has initiated a share repurchase program on Friday, June 20th that authorizes the company to repurchase $1.00 billion in shares. This repurchase authorization authorizes the restaurant operator to buy up to 3.8% of its stock through open market purchases. Stock repurchase programs are often an indication that the company's leadership believes its shares are undervalued.

Insider Buying and Selling

In other news, SVP Matthew R. Broad sold 733 shares of the firm's stock in a transaction on Tuesday, July 1st. The shares were sold at an average price of $218.50, for a total transaction of $160,160.50. Following the transaction, the senior vice president owned 14,367 shares in the company, valued at approximately $3,139,189.50. This trade represents a 4.85% decrease in their position. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which can be accessed through this link. Also, insider Laura B. Williamson sold 523 shares of the firm's stock in a transaction on Wednesday, July 30th. The shares were sold at an average price of $204.65, for a total transaction of $107,031.95. Following the transaction, the insider owned 5,423 shares in the company, valued at $1,109,816.95. This represents a 8.80% decrease in their position. The disclosure for this sale can be found here. Over the last quarter, insiders have sold 45,727 shares of company stock worth $10,022,232. Insiders own 0.49% of the company's stock.

Institutional Inflows and Outflows

Hedge funds and other institutional investors have recently modified their holdings of the business. Twin Peaks Wealth Advisors LLC bought a new position in shares of Darden Restaurants during the 2nd quarter valued at $26,000. Grove Bank & Trust grew its stake in Darden Restaurants by 171.4% in the 1st quarter. Grove Bank & Trust now owns 133 shares of the restaurant operator's stock valued at $28,000 after buying an additional 84 shares during the last quarter. Elevation Point Wealth Partners LLC acquired a new position in Darden Restaurants in the 2nd quarter valued at $29,000. True Wealth Design LLC grew its stake in Darden Restaurants by 419.2% in the 2nd quarter. True Wealth Design LLC now owns 135 shares of the restaurant operator's stock valued at $29,000 after buying an additional 109 shares during the last quarter. Finally, ORG Partners LLC grew its stake in Darden Restaurants by 108.8% in the 1st quarter. ORG Partners LLC now owns 142 shares of the restaurant operator's stock valued at $30,000 after buying an additional 74 shares during the last quarter. Institutional investors own 93.64% of the company's stock.

About Darden Restaurants

Darden Restaurants, Inc, together with its subsidiaries, owns and operates full-service restaurants in the United States and Canada. It operates under Olive Garden, LongHorn Steakhouse, Cheddar's Scratch Kitchen, Yard House, The Capital Grille, Seasons 52, Bahama Breeze, Eddie V's Prime Seafood, and Capital Burger brand names.