Picton Mahoney Asset Management Raises Holdings in Darden Restaurants, Inc. (NYSE:DRI)

Key Points

• Picton Mahoney Asset Management has significantly increased its stake in Darden Restaurants, reporting a 111.3% increase during the first quarter, now owning 63,615 shares valued at $13.2 million.
• Darden Restaurants announced a $1 billion share buyback program, indicating management's belief that the stock is undervalued, alongside a quarterly dividend increase from $1.40 to $1.50 per share.
• The company reported better-than-expected earnings results, with a Q4 EPS of $2.98, surpassing estimates and showcasing a 10.6% year-over-year revenue growth.

Picton Mahoney Asset Management lifted its stake in shares of Darden Restaurants, Inc. (NYSE:DRI - Free Report) by 111.3% in the first quarter, according to its most recent Form 13F filing with the Securities and Exchange Commission (SEC). The fund owned 63,615 shares of the restaurant operator's stock after acquiring an additional 33,515 shares during the quarter. Picton Mahoney Asset Management owned approximately 0.05% of Darden Restaurants worth $13,216,000 as of its most recent filing with the Securities and Exchange Commission (SEC).

A number of other hedge funds also recently made changes to their positions in DRI. GAMMA Investing LLC increased its holdings in Darden Restaurants by 46,484.5% in the first quarter. GAMMA Investing LLC now owns 928,895 shares of the restaurant operator's stock worth $192,987,000 after purchasing an additional 926,901 shares in the last quarter. Norges Bank bought a new stake in Darden Restaurants in the fourth quarter worth approximately $75,137,000. Junto Capital Management LP acquired a new stake in Darden Restaurants in the fourth quarter valued at approximately $48,919,000. Royal Bank of Canada grew its stake in Darden Restaurants by 145.2% in the fourth quarter. Royal Bank of Canada now owns 385,029 shares of the restaurant operator's stock valued at $71,883,000 after acquiring an additional 227,977 shares during the period. Finally, Bank of Montreal Can grew its stake in Darden Restaurants by 184.3% in the fourth quarter. Bank of Montreal Can now owns 297,938 shares of the restaurant operator's stock valued at $55,622,000 after acquiring an additional 193,134 shares during the period. 93.64% of the stock is currently owned by institutional investors.

Insider Transactions at Darden Restaurants

In other Darden Restaurants news, SVP Susan M. Connelly sold 4,735 shares of the business's stock in a transaction on Tuesday, June 24th. The stock was sold at an average price of $223.78, for a total value of $1,059,598.30. Following the sale, the senior vice president directly 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 filing with the SEC, which is available through the SEC website. Also, SVP Douglas J. Milanes sold 11,948 shares of the business's stock in a transaction on Tuesday, June 24th. The shares were sold at an average price of $222.08, for a total value of $2,653,411.84. Following the completion of the sale, the senior vice president owned 147 shares in the company, valued at approximately $32,645.76. The trade was a 98.78% decrease in their ownership of the stock. The disclosure for this sale can be found here. Over the last 90 days, insiders sold 43,714 shares of company stock valued at $9,609,494. 0.58% of the stock is currently owned by insiders.

Darden Restaurants Stock Performance

Shares of DRI traded down $0.31 during mid-day trading on Tuesday, hitting $202.80. The stock had a trading volume of 1,017,298 shares, compared to its average volume of 1,079,642. The firm has a market cap of $23.73 billion, a P/E ratio of 22.84, a PEG ratio of 1.87 and a beta of 0.74. The business has a fifty day moving average price of $214.05 and a 200-day moving average price of $202.48. The company has a debt-to-equity ratio of 0.92, a current ratio of 0.42 and a quick ratio of 0.28. Darden Restaurants, Inc. has a 52 week low of $140.10 and a 52 week high of $228.27.

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

Darden Restaurants declared that its board has approved a stock buyback program 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 programs are typically an indication that the company's leadership believes its shares are undervalued.

Darden Restaurants Increases Dividend

The company also recently announced a quarterly dividend, which will be paid on Friday, August 1st. Shareholders of record on Thursday, July 10th will be paid a $1.50 dividend. The ex-dividend date is Thursday, July 10th. This is a positive change from Darden Restaurants's previous quarterly dividend of $1.40. This represents a $6.00 annualized dividend and a dividend yield of 2.96%. Darden Restaurants's payout ratio is presently 67.57%.

Analysts Set New Price Targets

A number of equities research analysts have commented on DRI shares. JPMorgan Chase & Co. raised their price objective on Darden Restaurants from $218.00 to $240.00 and gave the company an "overweight" rating in a research note on Wednesday, June 25th. Truist Financial raised their price objective on Darden Restaurants from $230.00 to $252.00 and gave the company a "buy" rating in a research note on Wednesday, June 18th. Morgan Stanley raised their price objective on Darden Restaurants from $215.00 to $235.00 and gave the company an "overweight" rating in a research note on Wednesday, June 18th. BMO Capital Markets raised their price objective on Darden Restaurants from $190.00 to $215.00 and gave the company a "market perform" rating in a research note on Wednesday, June 25th. Finally, Melius Research raised Darden Restaurants to a "hold" rating in a research report on Monday, July 14th. Twelve analysts have rated the stock with a hold rating and sixteen have given a buy rating to the company's stock. According to MarketBeat.com, the stock has an average rating of "Moderate Buy" and a consensus target price of $225.19.

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.