Darden Restaurants, Inc. (NYSE:DRI) Receives Average Recommendation of "Moderate Buy" from Brokerages

Key Points

• Darden Restaurants, Inc. has received an average analyst rating of "Moderate Buy" from 27 ratings firms, with 16 analysts giving a buy rating and 11 a hold rating.
• The company recently announced a quarterly dividend of $1.50 per share, which reflects an annualized dividend yield of 2.9% and an increase from the previous dividend of $1.40.
• Darden's stock is currently trading around $210.25, with a 52-week range between $153.98 and $228.27, and the company's market capitalization stands at $24.52 billion.

Darden Restaurants, Inc. (NYSE:DRI - Get Free Report) has been given an average rating of "Moderate Buy" by the twenty-seven ratings firms that are presently covering the stock, Marketbeat.com reports. Eleven investment analysts have rated the stock with a hold rating and sixteen have given a buy rating to the company. The average 1 year price objective among analysts that have updated their coverage on the stock in the last year is $225.1923.

DRI has been the subject of a number of research analyst reports. Melius initiated coverage on shares of Darden Restaurants in a research note on Monday, July 14th. They issued a "hold" rating and a $240.00 price target for the company. Citigroup boosted their target price on shares of Darden Restaurants from $245.00 to $253.00 and gave the company a "buy" rating in a research report on Monday, June 23rd. Raymond James Financial boosted their target price on shares of Darden Restaurants from $230.00 to $240.00 and gave the company an "outperform" rating in a research report on Monday, June 23rd. Bank of America boosted their target price on shares of Darden Restaurants from $252.00 to $253.00 and gave the company a "buy" rating in a research report on Monday, June 23rd. Finally, BMO Capital Markets boosted their target price on shares of Darden Restaurants from $190.00 to $215.00 and gave the company a "market perform" rating in a research report on Wednesday, June 25th.

Insider Activity at Darden Restaurants

In other Darden Restaurants news, CFO Rajesh Vennam sold 5,780 shares of Darden Restaurants stock in a transaction that occurred on Tuesday, June 24th. The shares were sold at an average price of $222.22, for a total transaction of $1,284,431.60. Following the transaction, the chief financial officer owned 4,555 shares of the company's stock, valued at $1,012,212.10. The trade was a 55.93% decrease in their ownership of the stock. The sale was disclosed in a document filed with the Securities & Exchange Commission, which is available through the SEC website. Also, insider Todd Burrowes sold 13,569 shares of Darden Restaurants stock in a transaction that occurred on Monday, June 30th. The shares were sold at an average price of $216.45, for a total transaction of $2,937,010.05. Following the transaction, the insider directly owned 46,327 shares in the company, valued at $10,027,479.15. This represents a 22.65% decrease in their position. The disclosure for this sale can be found here. Insiders sold a total of 45,727 shares of company stock valued at $10,022,232 in the last three months. Corporate insiders own 0.49% of the company's stock.

Hedge Funds Weigh In On Darden Restaurants

Several large investors have recently added to or reduced their stakes in the company. Vanguard Group Inc. lifted its holdings in Darden Restaurants by 2.1% during the second quarter. Vanguard Group Inc. now owns 14,055,185 shares of the restaurant operator's stock valued at $3,063,609,000 after purchasing an additional 284,814 shares in the last quarter. State Street Corp lifted its holdings in shares of Darden Restaurants by 2.1% in the second quarter. State Street Corp now owns 4,916,944 shares of the restaurant operator's stock worth $1,071,746,000 after buying an additional 100,270 shares in the last quarter. Charles Schwab Investment Management Inc. lifted its holdings in shares of Darden Restaurants by 1.9% in the second quarter. Charles Schwab Investment Management Inc. now owns 4,073,901 shares of the restaurant operator's stock worth $887,988,000 after buying an additional 75,701 shares in the last quarter. Raymond James Financial Inc. lifted its holdings in shares of Darden Restaurants by 4.6% in the first quarter. Raymond James Financial Inc. now owns 3,601,340 shares of the restaurant operator's stock worth $748,215,000 after buying an additional 157,305 shares in the last quarter. Finally, Geode Capital Management LLC lifted its holdings in shares of Darden Restaurants by 5.9% in the second quarter. Geode Capital Management LLC now owns 3,134,246 shares of the restaurant operator's stock worth $680,418,000 after buying an additional 175,811 shares in the last quarter. Hedge funds and other institutional investors own 93.64% of the company's stock.

Darden Restaurants Stock Performance

Shares of DRI stock opened at $210.25 on Monday. The company has a 50 day moving average price of $208.36 and a 200-day moving average price of $205.40. Darden Restaurants has a 52 week low of $153.98 and a 52 week high of $228.27. The firm has a market capitalization of $24.52 billion, a PE ratio of 23.68, a P/E/G ratio of 1.93 and a beta of 0.71. The company has a quick ratio of 0.28, a current ratio of 0.42 and a debt-to-equity ratio of 0.92.

Darden Restaurants (NYSE:DRI - Get Free Report) last announced its quarterly earnings results on Friday, June 20th. The restaurant operator reported $2.98 EPS for the quarter, topping analysts' consensus estimates of $2.97 by $0.01. Darden Restaurants had a net margin of 8.69% and a return on equity of 51.81%. The firm had revenue of $3.27 billion during the quarter, compared to analyst estimates of $3.25 billion. During the same period in the previous year, the business posted $2.65 earnings per share. The business's revenue for the quarter was up 10.6% on a year-over-year basis. Darden Restaurants has set its FY 2026 guidance at 10.500-10.700 EPS. As a group, equities research analysts expect that Darden Restaurants will post 9.52 earnings per share for the current year.

Darden Restaurants Increases Dividend

The firm also recently announced a quarterly dividend, which was paid on Friday, August 1st. Investors of record on Thursday, July 10th were given a dividend of $1.50 per share. This represents a $6.00 annualized dividend and a yield of 2.9%. This is a positive change from Darden Restaurants's previous quarterly dividend of $1.40. The ex-dividend date was Thursday, July 10th. Darden Restaurants's dividend payout ratio (DPR) is presently 67.57%.

Darden Restaurants announced that its Board of Directors has initiated a stock repurchase plan on Friday, June 20th that allows the company to buyback $1.00 billion in shares. This buyback authorization allows the restaurant operator to purchase up to 3.8% of its stock through open market purchases. Stock buyback plans are usually a sign that the company's management believes its stock is undervalued.

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.

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