Eastern Bank Trims Stake in Darden Restaurants, Inc. (NYSE:DRI)

Key Points

• Eastern Bank reduced its holdings in Darden Restaurants, Inc. by 34.0%, resulting in ownership of 6,068 shares valued at approximately $1.26 million after selling 3,121 shares in the first quarter.
• Insider transactions revealed that both SVP Susan M. Connelly and CFO Rajesh Vennam sold significant shares, reducing their ownership by over 50% post-sale.
• Darden Restaurants announced a $1 billion share buyback plan, indicating management believes its shares to be undervalued, alongside a dividend increase to $1.50 per share from $1.40.

Eastern Bank trimmed its holdings in shares of Darden Restaurants, Inc. (NYSE:DRI - Free Report) by 34.0% in the 1st quarter, according to its most recent disclosure with the SEC. The fund owned 6,068 shares of the restaurant operator's stock after selling 3,121 shares during the period. Eastern Bank's holdings in Darden Restaurants were worth $1,261,000 as of its most recent SEC filing.

Several other large investors have also recently made changes to their positions in DRI. Envestnet Asset Management Inc. raised its holdings in Darden Restaurants by 3.8% in the 4th quarter. Envestnet Asset Management Inc. now owns 358,891 shares of the restaurant operator's stock worth $67,001,000 after acquiring an additional 13,074 shares during the last quarter. Wealth Enhancement Advisory Services LLC raised its holdings in Darden Restaurants by 31.8% in the 1st quarter. Wealth Enhancement Advisory Services LLC now owns 15,230 shares of the restaurant operator's stock worth $3,164,000 after acquiring an additional 3,677 shares during the last quarter. Twin Capital Management Inc. purchased a new position in Darden Restaurants in the 4th quarter worth approximately $286,000. Choreo LLC raised its holdings in Darden Restaurants by 46.0% in the 1st quarter. Choreo LLC now owns 16,248 shares of the restaurant operator's stock worth $3,376,000 after acquiring an additional 5,119 shares during the last quarter. Finally, O Shaughnessy Asset Management LLC raised its holdings in Darden Restaurants by 15.4% in the 4th quarter. O Shaughnessy Asset Management LLC now owns 12,882 shares of the restaurant operator's stock worth $2,405,000 after acquiring an additional 1,720 shares during the last quarter. 93.64% of the stock is currently owned by hedge funds and other institutional investors.

Darden Restaurants Price Performance

Shares of DRI traded up $1.85 during midday trading on Friday, hitting $203.52. 1,158,409 shares of the company traded hands, compared to its average volume of 1,092,358. The firm has a 50 day moving average of $214.00 and a 200-day moving average of $202.76. Darden Restaurants, Inc. has a 52 week low of $140.10 and a 52 week high of $228.27. The stock has a market cap of $23.82 billion, a price-to-earnings ratio of 22.92, a PEG ratio of 1.87 and a beta of 0.75. The company has a debt-to-equity ratio of 0.92, a quick ratio of 0.28 and a current ratio of 0.42.

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

Darden Restaurants Increases Dividend

The business also recently disclosed a quarterly dividend, which was paid on Friday, August 1st. Shareholders of record on Thursday, July 10th were issued a dividend of $1.50 per share. This is a boost from Darden Restaurants's previous quarterly dividend of $1.40. The ex-dividend date of this dividend was Thursday, July 10th. This represents a $6.00 annualized dividend and a dividend yield of 2.9%. Darden Restaurants's payout ratio is currently 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 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 often a sign that the company's management believes its shares are undervalued.

Wall Street Analyst Weigh In

DRI has been the subject of a number of recent analyst reports. Barclays boosted their price objective on shares of Darden Restaurants from $235.00 to $255.00 and gave the stock an "overweight" rating in a 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 note on Monday, June 23rd. Jefferies Financial Group upgraded shares of Darden Restaurants from an "underperform" rating to a "hold" rating and boosted their target price for the company from $165.00 to $210.00 in a research note on Friday, June 13th. 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 note on Monday, June 23rd. Finally, Wall Street Zen lowered shares of Darden Restaurants from a "buy" rating to a "hold" rating in a research note on Friday, June 27th. Twelve research analysts have rated the stock with a hold rating and sixteen have assigned a buy rating to the company's stock. Based on data from MarketBeat.com, Darden Restaurants presently has a consensus rating of "Moderate Buy" and an average price target of $225.19.

Insider Buying and Selling at Darden Restaurants

In other news, SVP Matthew R. Broad sold 6,949 shares of the company's stock in a transaction dated Monday, June 30th. The shares were sold at an average price of $218.00, for a total transaction of $1,514,882.00. Following the sale, the senior vice president directly owned 14,367 shares in the company, valued at approximately $3,132,006. This represents a 32.60% decrease in their position. The sale was disclosed in a filing with the Securities & Exchange Commission, which can be accessed through the SEC website. Also, SVP Susan M. Connelly sold 4,735 shares of the company's stock in a transaction dated Tuesday, June 24th. The shares were sold at an average price of $223.78, for a total transaction of $1,059,598.30. Following the sale, the senior vice president owned 4,602 shares in the company, valued at $1,029,835.56. This represents a 50.71% decrease in their ownership of the stock. The disclosure for this sale can be found here. Over the last three months, insiders have sold 45,727 shares of company stock worth $10,022,232. Insiders own 0.58% of the company's stock.

Darden Restaurants Profile

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.