Applied Finance Capital Management LLC Sells 119,469 Shares of Darden Restaurants, Inc. (NYSE:DRI)

Key Points

• Applied Finance Capital Management LLC **reduced its stake in Darden Restaurants** by **48.2%**, now holding **128,343 shares** worth approximately **$26.67 million**.
• Darden Restaurants has announced a **$1 billion share repurchase program**, signaling management's belief that the stock is **undervalued**.
• The company recently declared a **quarterly dividend increase** to **$1.50 per share**, with a current **dividend yield of 2.94%**.

Applied Finance Capital Management LLC lowered its position in shares of Darden Restaurants, Inc. (NYSE:DRI - Free Report) by 48.2% during the 1st quarter, according to its most recent disclosure with the Securities & Exchange Commission. The institutional investor owned 128,343 shares of the restaurant operator's stock after selling 119,469 shares during the quarter. Darden Restaurants comprises 2.0% of Applied Finance Capital Management LLC's portfolio, making the stock its 15th largest position. Applied Finance Capital Management LLC owned approximately 0.11% of Darden Restaurants worth $26,665,000 at the end of the most recent quarter.

Other large investors also recently bought and sold shares of the company. LPL Financial LLC raised its holdings in shares of Darden Restaurants by 19.5% during the fourth quarter. LPL Financial LLC now owns 83,951 shares of the restaurant operator's stock valued at $15,673,000 after buying an additional 13,682 shares during the last quarter. TIAA Trust National Association increased its stake in shares of Darden Restaurants by 4.8% during the fourth quarter. TIAA Trust National Association now owns 1,401 shares of the restaurant operator's stock valued at $262,000 after acquiring an additional 64 shares during the period. Mitsubishi UFJ Asset Management Co. Ltd. boosted its stake in Darden Restaurants by 2.7% during the fourth quarter. Mitsubishi UFJ Asset Management Co. Ltd. now owns 194,603 shares of the restaurant operator's stock valued at $36,531,000 after buying an additional 5,134 shares in the last quarter. Elo Mutual Pension Insurance Co raised its holdings in shares of Darden Restaurants by 20.3% in the 4th quarter. Elo Mutual Pension Insurance Co now owns 12,757 shares of the restaurant operator's stock worth $2,382,000 after purchasing an additional 2,155 shares in the last quarter. Finally, UniSuper Management Pty Ltd boosted its position in shares of Darden Restaurants by 12.7% in the 4th quarter. UniSuper Management Pty Ltd now owns 14,366 shares of the restaurant operator's stock valued at $2,682,000 after purchasing an additional 1,622 shares during the period. Institutional investors own 93.64% of the company's stock.

Insider Activity at Darden Restaurants

In other news, SVP Susan M. Connelly sold 4,735 shares of the business's stock in a transaction that occurred on Tuesday, June 24th. The stock was sold at an average price of $223.78, for a total transaction of $1,059,598.30. Following the completion of the sale, the senior vice president owned 4,602 shares in the company, valued at $1,029,835.56. The trade was a 50.71% decrease in their ownership of the stock. The sale was disclosed in a legal filing with the SEC, which is available at this hyperlink. Also, insider Laura B. Williamson sold 333 shares of the business's stock in a transaction that occurred on Monday, July 21st. The stock was sold at an average price of $206.81, for a total value of $68,867.73. Following the sale, the insider owned 5,423 shares of the company's stock, valued at approximately $1,121,530.63. This represents a 5.79% decrease in their position. The disclosure for this sale can be found here. Over the last quarter, insiders have sold 44,047 shares of company stock valued at $9,678,362. Insiders own 0.58% of the company's stock.

Analysts Set New Price Targets

A number of equities analysts have recently weighed in on DRI shares. Truist Financial upped their target price on Darden Restaurants from $230.00 to $252.00 and gave the company a "buy" rating in a report on Wednesday, June 18th. Melius assumed 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 on the stock. Bank of America lifted their price objective on Darden Restaurants from $252.00 to $253.00 and gave the company a "buy" rating in a research report on Monday, June 23rd. Morgan Stanley upped their target price on Darden Restaurants from $215.00 to $235.00 and gave the stock an "overweight" rating in a research report on Wednesday, June 18th. Finally, JPMorgan Chase & Co. lifted their price target on Darden Restaurants from $218.00 to $240.00 and gave the company an "overweight" rating in a report on Wednesday, June 25th. Twelve research analysts have rated the stock with a hold rating and sixteen have given a buy rating to the company. Based on data from MarketBeat, Darden Restaurants has an average rating of "Moderate Buy" and an average price target of $225.19.

Darden Restaurants Stock Performance

NYSE:DRI traded up $2.22 during mid-day trading on Wednesday, hitting $204.95. The stock had a trading volume of 591,666 shares, compared to its average volume of 1,354,792. The company has a debt-to-equity ratio of 0.92, a quick ratio of 0.28 and a current ratio of 0.42. The company's 50 day simple moving average is $214.05 and its 200 day simple moving average is $202.48. The stock has a market cap of $23.98 billion, a price-to-earnings ratio of 23.07, a PEG ratio of 1.87 and a beta of 0.74. Darden Restaurants, Inc. has a twelve month low of $140.10 and a twelve month high of $228.27.

Darden Restaurants (NYSE:DRI - Get Free Report) last posted its quarterly earnings results on Friday, June 20th. The restaurant operator reported $2.98 earnings per share for the quarter, beating analysts' consensus estimates of $2.97 by $0.01. The business had revenue of $3.27 billion for the quarter, compared to analysts' expectations of $3.25 billion. Darden Restaurants had a return on equity of 51.81% and a net margin of 8.69%. The firm's revenue for the quarter was up 10.6% on a year-over-year basis. During the same quarter in the prior year, the business earned $2.65 EPS. On average, equities research analysts forecast that Darden Restaurants, Inc. will post 9.52 earnings per share for the current year.

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

Darden Restaurants Increases Dividend

The company also recently disclosed a quarterly dividend, which will be paid on Friday, August 1st. Stockholders of record on Thursday, July 10th will be issued a dividend of $1.50 per share. This represents a $6.00 dividend on an annualized basis and a dividend yield of 2.93%. The ex-dividend date of this dividend is Thursday, July 10th. This is a boost from Darden Restaurants's previous quarterly dividend of $1.40. Darden Restaurants's payout ratio is currently 67.57%.

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.