Darden Restaurants (NYSE:DRI) Given New $240.00 Price Target at Evercore ISI

Key Points

• Evercore ISI has lowered its price target for Darden Restaurants from $245.00 to $240.00, maintaining an "outperform" rating, which still suggests a potential upside of 28.58% from the current trading price.
• Darden's stock recently dropped by $6.08 to $186.66, amidst mixed analyst ratings, with a consensus rating of "Moderate Buy" and an average price target of $226.56.
• The company reported quarterly earnings of $1.97 per share, falling short of estimates, while also announcing a $1.00 billion share buyback program, indicating management believes the stock is undervalued.

Darden Restaurants (NYSE:DRI - Free Report) had its target price cut by Evercore ISI from $245.00 to $240.00 in a research report sent to investors on Friday morning,Benzinga reports. They currently have an outperform rating on the restaurant operator's stock.

A number of other equities research analysts also recently weighed in on the stock. Wall Street Zen downgraded shares of Darden Restaurants from a "buy" rating to a "hold" rating in a research note on Friday, June 27th. Raymond James Financial lifted 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. JPMorgan Chase & Co. increased their price target on shares of Darden Restaurants from $218.00 to $240.00 and gave the stock an "overweight" rating in a research report on Wednesday, June 25th. UBS Group lifted their price objective on Darden Restaurants from $225.00 to $245.00 and gave the company a "buy" rating in a report on Monday, June 16th. Finally, Guggenheim increased their target price on Darden Restaurants from $220.00 to $235.00 and gave the stock a "buy" rating in a report on Wednesday, September 17th. Eighteen research analysts have rated the stock with a Buy rating and ten have given a Hold rating to the stock. According to data from MarketBeat, Darden Restaurants presently has an average rating of "Moderate Buy" and a consensus price target of $225.96.

Darden Restaurants Stock Up 0.2%

Shares of NYSE:DRI traded up $0.34 on Friday, reaching $185.07. The company had a trading volume of 1,918,937 shares, compared to its average volume of 1,329,432. The stock has a market capitalization of $21.58 billion, a P/E ratio of 19.84, a P/E/G ratio of 1.69 and a beta of 0.71. The stock has a 50-day moving average price of $206.37 and a 200 day moving average price of $206.24. Darden Restaurants has a twelve month low of $155.18 and a twelve month high of $228.27. The company has a quick ratio of 0.27, a current ratio of 0.40 and a debt-to-equity ratio of 0.96.

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

Darden Restaurants Announces Dividend

The company also recently disclosed a quarterly dividend, which will be paid on Monday, November 3rd. Shareholders of record on Friday, October 10th will be issued a dividend of $1.50 per share. This represents a $6.00 annualized dividend and a yield of 3.2%. The ex-dividend date of this dividend is Friday, October 10th. Darden Restaurants's payout ratio is currently 64.31%.

Darden Restaurants declared that its board has initiated a share repurchase plan on Friday, June 20th that allows the company to buyback $1.00 billion in outstanding shares. This buyback authorization allows the restaurant operator to repurchase up to 3.8% of its stock through open market purchases. Stock buyback plans are generally an indication that the company's management believes its stock is undervalued.

Insider Activity at Darden Restaurants

In related news, insider Todd Burrowes sold 13,569 shares of the stock in a transaction that occurred on Monday, June 30th. The shares were sold at an average price of $216.45, for a total value of $2,937,010.05. Following the sale, the insider directly owned 46,327 shares in the company, valued at $10,027,479.15. This trade represents a 22.65% decrease in their position. The sale was disclosed in a legal filing with the SEC, which is available at this link. Also, insider Laura B. Williamson sold 523 shares of the business's stock in a transaction that occurred 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 of the company's stock, valued at approximately $1,109,816.95. This represents a 8.80% decrease in their position. The disclosure for this sale can be found here. Insiders have sold 45,727 shares of company stock worth $10,022,232 over the last 90 days. Insiders own 0.49% of the company's stock.

Institutional Investors Weigh In On Darden Restaurants

Several large investors have recently modified their holdings of DRI. Bowman & Co S.C. grew its position in shares of Darden Restaurants by 0.5% in the 2nd quarter. Bowman & Co S.C. now owns 9,631 shares of the restaurant operator's stock valued at $2,099,000 after purchasing an additional 48 shares during the period. Rise Advisors LLC raised its holdings in shares of Darden Restaurants by 32.2% during the first quarter. Rise Advisors LLC now owns 201 shares of the restaurant operator's stock worth $42,000 after acquiring an additional 49 shares during the period. Ballentine Partners LLC raised its holdings in shares of Darden Restaurants by 2.5% during the second quarter. Ballentine Partners LLC now owns 1,975 shares of the restaurant operator's stock worth $430,000 after acquiring an additional 49 shares during the period. GAM Holding AG lifted its position in Darden Restaurants by 0.7% in the 2nd quarter. GAM Holding AG now owns 6,975 shares of the restaurant operator's stock valued at $1,520,000 after acquiring an additional 51 shares in the last quarter. Finally, SBI Securities Co. Ltd. boosted its stake in Darden Restaurants by 15.8% in the 1st quarter. SBI Securities Co. Ltd. now owns 381 shares of the restaurant operator's stock worth $79,000 after purchasing an additional 52 shares during the period. 93.64% of the stock is currently owned by institutional investors.

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.