Darden Restaurants (NYSE:DRI) Reaches New 1-Year High - What's Next?

Key Points

• Darden Restaurants shares reached a new 52-week high of $221, with the stock recently trading around $220. Analysts maintain a “Moderate Buy” consensus and an average price target of $228.88.
• The company exceeded quarterly earnings expectations, reporting $3.66 in EPS versus the $3.63 consensus, while revenue rose 13.7% year over year to $3.72 billion.
• Darden raised its quarterly dividend to $1.62, equating to a $6.48 annualized payout and a 2.9% yield; however, company insiders sold approximately $14.6 million in stock over the past three months.

Darden Restaurants, Inc. (NYSE:DRI - Get Free Report) shares reached a new 52-week high during trading on Wednesday . The company traded as high as $221.00 and last traded at $220.4310, with a volume of 39297 shares changing hands. The stock had previously closed at $218.90.

Analyst Ratings Changes

DRI has been the subject of several recent analyst reports. Oppenheimer restated an "outperform" rating and set a $235.00 target price on shares of Darden Restaurants in a research note on Thursday, June 18th. KeyCorp increased their price target on shares of Darden Restaurants from $226.00 to $228.00 and gave the company an "overweight" rating in a research note on Wednesday, May 27th. Guggenheim boosted their price objective on shares of Darden Restaurants from $230.00 to $235.00 and gave the stock a "buy" rating in a research report on Wednesday, June 24th. Stephens boosted their price objective on shares of Darden Restaurants from $210.00 to $216.00 and gave the stock an "equal weight" rating in a research report on Friday, June 26th. Finally, Weiss Ratings cut shares of Darden Restaurants from a "buy (b)" rating to a "buy (b-)" rating in a report on Tuesday, July 28th. Seventeen analysts have rated the stock with a Buy rating and ten have given a Hold rating to the company's stock. According to data from MarketBeat, the company has a consensus rating of "Moderate Buy" and an average price target of $228.88.

Darden Restaurants Trading Up 0.6%

The stock has a market capitalization of $25.12 billion, a price-to-earnings ratio of 21.22, a PEG ratio of 2.17 and a beta of 0.60. The company has a debt-to-equity ratio of 0.74, a quick ratio of 0.21 and a current ratio of 0.31. The business has a 50-day moving average of $204.90 and a 200-day moving average of $203.19.

Darden Restaurants (NYSE:DRI - Get Free Report) last released its quarterly earnings results on Thursday, June 25th. The restaurant operator reported $3.66 EPS for the quarter, topping the consensus estimate of $3.63 by $0.03. The company had revenue of $3.72 billion for the quarter, compared to analyst estimates of $3.73 billion. Darden Restaurants had a return on equity of 57.44% and a net margin of 9.13%.The firm's revenue was up 13.7% compared to the same quarter last year. During the same quarter in the previous year, the company posted $2.98 earnings per share. Darden Restaurants has set its FY 2027 guidance at 11.100-11.350 EPS. As a group, research analysts forecast that Darden Restaurants, Inc. will post 11.28 EPS for the current year.

Darden Restaurants Increases Dividend

The firm also recently declared a quarterly dividend, which was paid on Monday, August 3rd. Investors of record on Friday, July 10th were given a $1.62 dividend. This is a positive change from Darden Restaurants's previous quarterly dividend of $1.50. The ex-dividend date was Friday, July 10th. This represents a $6.48 annualized dividend and a yield of 2.9%. Darden Restaurants's payout ratio is currently 62.43%.

Insider Activity at Darden Restaurants

In other Darden Restaurants news, CEO Ricardo Cardenas sold 39,134 shares of the firm's stock in a transaction on Tuesday, July 28th. The shares were sold at an average price of $209.06, for a total transaction of $8,181,354.04. Following the transaction, the chief executive officer directly owned 86,146 shares of the company's stock, valued at approximately $18,009,682.76. This trade represents a 31.24% decrease in their position. The sale was disclosed in a document filed with the SEC, which is available at the SEC website. Also, CFO Rajesh Vennam sold 8,478 shares of the firm's stock in a transaction dated 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 transaction, the chief financial officer directly owned 8,569 shares in the company, valued at approximately $1,799,490. This represents a 49.73% decrease in their position. The SEC filing for this sale provides additional information. Insiders sold a total of 70,185 shares of company stock worth $14,636,984 in the last three months. Company insiders own 0.49% of the company's stock.

Hedge Funds Weigh In On Darden Restaurants

A number of large investors have recently bought and sold shares of DRI. BlackRock Inc. purchased a new stake in Darden Restaurants during the second quarter worth about $2,015,109,000. Wellington Management Group LLP increased its holdings in Darden Restaurants by 81.0% in the fourth quarter. Wellington Management Group LLP now owns 8,077,567 shares of the restaurant operator's stock valued at $1,486,434,000 after buying an additional 3,613,781 shares in the last quarter. Bank of America Corp DE lifted its position in shares of Darden Restaurants by 44.6% during the 1st quarter. Bank of America Corp DE now owns 3,212,283 shares of the restaurant operator's stock valued at $629,736,000 after acquiring an additional 991,230 shares during the period. Bank of New York Mellon Corp acquired a new stake in shares of Darden Restaurants during the 2nd quarter valued at approximately $204,099,000. Finally, Norges Bank purchased a new stake in shares of Darden Restaurants during the 4th quarter worth approximately $144,483,000. Hedge funds and other institutional investors own 93.64% of the company's stock.

About Darden Restaurants

Darden Restaurants, Inc is a multi-brand, full-service restaurant company headquartered in Orlando, Florida. The company owns and operates a portfolio of casual and fine-dining concepts that together serve millions of guests through company-owned and franchised locations. Its well-known brands include Olive Garden and LongHorn Steakhouse, alongside other dining concepts that span Italian, American, steakhouse and upscale casual formats.

Darden's restaurants provide a range of guest-facing services including dine-in, takeout, delivery and catering, and feature menus tailored to each brand's positioning—Italian-American fare at Olive Garden, steaks and grilled items at LongHorn, and more premium steakhouse and chef-driven offerings at its upscale concepts.

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