Junto Capital Management LP Lowers Stake in Darden Restaurants, Inc. $DRI

Key Points

• Junto Capital Management LP has reduced its position in Darden Restaurants by 14.1%, selling 37,076 shares and owning 224,957 shares afterward, valued at approximately $46.74 million.
• Darden Restaurants has announced a $1 billion stock buyback program, allowing for the repurchase of up to 3.8% of its stock, indicating management's belief in the company's undervaluation.
• The company reported $2.98 EPS for the last quarter, surpassing estimates, and has increased its quarterly dividend from $1.40 to $1.50, reflecting a 2.9% yield.

Junto Capital Management LP cut its holdings in shares of Darden Restaurants, Inc. (NYSE:DRI - Free Report) by 14.1% during the 1st quarter, according to its most recent Form 13F filing with the Securities and Exchange Commission (SEC). The fund owned 224,957 shares of the restaurant operator's stock after selling 37,076 shares during the period. Junto Capital Management LP owned approximately 0.19% of Darden Restaurants worth $46,737,000 at the end of the most recent reporting period.

Several other institutional investors and hedge funds have also bought and sold shares of the company. GAMMA Investing LLC lifted its stake 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 during the last quarter. Nuveen LLC purchased a new position in shares of Darden Restaurants during the first quarter worth approximately $84,801,000. 1832 Asset Management L.P. purchased a new position in shares of Darden Restaurants during the first quarter worth approximately $53,760,000. Charles Schwab Investment Management Inc. increased its position in shares of Darden Restaurants by 6.6% during the first quarter. Charles Schwab Investment Management Inc. now owns 3,998,200 shares of the restaurant operator's stock worth $830,666,000 after acquiring an additional 247,542 shares during the period. Finally, Royal Bank of Canada increased its position in shares of Darden Restaurants by 145.2% during the fourth quarter. Royal Bank of Canada now owns 385,029 shares of the restaurant operator's stock worth $71,883,000 after acquiring an additional 227,977 shares during the period. 93.64% of the stock is owned by hedge funds and other institutional investors.

Insider Activity at Darden Restaurants

In related news, insider Laura B. Williamson sold 523 shares of the business's stock in a transaction that occurred on Wednesday, July 30th. The stock was sold at an average price of $204.65, for a total transaction of $107,031.95. Following the completion of the sale, the insider owned 5,423 shares in the company, valued at $1,109,816.95. The trade was a 8.80% decrease in their ownership of the stock. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which is available through the SEC website. Also, SVP Susan M. Connelly sold 4,735 shares of the stock in a transaction on 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 completion of the transaction, the senior vice president directly owned 4,602 shares in the company, valued at $1,029,835.56. This trade represents a 50.71% decrease in their ownership of the stock. The disclosure for this sale can be found here. Insiders sold 45,727 shares of company stock worth $10,022,232 over the last 90 days. 0.49% of the stock is currently owned by corporate insiders.

Darden Restaurants Price Performance

NYSE DRI traded up $1.06 during trading hours on Tuesday, reaching $208.00. The company's stock had a trading volume of 783,248 shares, compared to its average volume of 1,300,107. The firm has a market capitalization of $24.25 billion, a price-to-earnings ratio of 23.42, a P/E/G ratio of 1.90 and a beta of 0.71. The company's 50-day moving average is $209.05 and its two-hundred day moving average is $205.02. 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 1-year low of $153.98 and a 1-year high of $228.27.

Darden Restaurants (NYSE:DRI - Get Free Report) last announced its quarterly earnings data 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 company had revenue of $3.27 billion during the quarter, compared to analysts' expectations of $3.25 billion. Darden Restaurants had a net margin of 8.69% and a return on equity of 51.81%. Darden Restaurants's revenue was up 10.6% compared to the same quarter last year. During the same quarter in the prior year, the company earned $2.65 EPS. Darden Restaurants has set its FY 2026 guidance at 10.500-10.700 EPS. On average, equities analysts predict that Darden Restaurants, Inc. will post 9.52 EPS for the current year.

Darden Restaurants declared that its Board of Directors has initiated a stock buyback program 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 shares through open market purchases. Shares buyback programs are generally a sign that the company's board believes its stock is undervalued.

Darden Restaurants Increases Dividend

The business also recently disclosed a quarterly dividend, which was paid on Friday, August 1st. Stockholders of record on Thursday, July 10th were issued a $1.50 dividend. The ex-dividend date was Thursday, July 10th. This represents a $6.00 annualized dividend and a dividend yield of 2.9%. This is an increase from Darden Restaurants's previous quarterly dividend of $1.40. Darden Restaurants's dividend payout ratio (DPR) is currently 67.57%.

Analyst Upgrades and Downgrades

Several brokerages recently issued reports on DRI. KeyCorp lifted their price objective on shares of Darden Restaurants from $230.00 to $245.00 and gave the company an "overweight" rating in a report on Monday, June 23rd. Evercore ISI lifted their price target on shares of Darden Restaurants from $230.00 to $250.00 and gave the stock an "outperform" rating in a report on Monday, June 16th. UBS Group lifted their price target on shares of Darden Restaurants from $225.00 to $245.00 and gave the stock a "buy" rating in a report on Monday, June 16th. Oppenheimer lifted their price objective on shares of Darden Restaurants from $230.00 to $250.00 and gave the stock an "outperform" rating in a research note on Wednesday, June 18th. Finally, Barclays lifted their price objective on shares of Darden Restaurants from $235.00 to $255.00 and gave the stock an "overweight" rating in a research note on Monday, June 23rd. Sixteen equities research analysts have rated the stock with a Buy rating and eleven have issued a Hold rating to the stock. Based on data from MarketBeat, the company presently has a consensus rating of "Moderate Buy" and an average price target 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.