Investors Purchase Large Volume of Darden Restaurants Put Options (NYSE:DRI)

Key Points

• On Monday, investors purchased 2,523 put options for Darden Restaurants (NYSE:DRI), marking a significant 61% increase in trading volume compared to the average of 1,568 put options.
• Company insiders, including CFO Rajesh Vennam, sold over 45,000 shares of Darden Restaurants stock in the last quarter, which raises concerns regarding their confidence in the company's stock performance.
• Darden Restaurants announced a quarterly dividend raise from $1.40 to $1.50 per share, representing an annualized yield of 2.8% for shareholders.

Darden Restaurants, Inc. (NYSE:DRI - Get Free Report) was the target of some unusual options trading activity on Monday. Stock traders bought 2,523 put options on the stock. Thisisanincreaseof61% compared to the average volume of 1,568 put options.

Insiders Place Their Bets

In other news, CFO Rajesh Vennam sold 5,780 shares of Darden Restaurants stock in a transaction on Tuesday, June 24th. The stock was sold at an average price of $222.22, for a total value of $1,284,431.60. Following the completion of the sale, the chief financial officer directly owned 4,555 shares of the company's stock, valued at approximately $1,012,212.10. This trade represents a 55.93% decrease in their position. The transaction was disclosed in a filing with the Securities & Exchange Commission, which is accessible through this hyperlink. Also, SVP Matthew R. Broad sold 733 shares of the company's stock in a transaction on Tuesday, July 1st. The shares were sold at an average price of $218.50, for a total value of $160,160.50. Following the transaction, the senior vice president directly owned 14,367 shares in the company, valued at $3,139,189.50. This trade represents a 4.85% decrease in their position. The disclosure for this sale can be found here. Insiders have sold a total of 45,727 shares of company stock valued at $10,022,232 over the last quarter. Company insiders own 0.49% of the company's stock.

Hedge Funds Weigh In On Darden Restaurants

A number of large investors have recently modified their holdings of DRI. Wealth Enhancement Advisory Services LLC lifted its position in shares of Darden Restaurants by 31.8% in the first quarter. Wealth Enhancement Advisory Services LLC now owns 15,230 shares of the restaurant operator's stock valued at $3,164,000 after buying an additional 3,677 shares during the last quarter. Choreo LLC raised its stake in Darden Restaurants by 46.0% in the 1st quarter. Choreo LLC now owns 16,248 shares of the restaurant operator's stock valued at $3,376,000 after acquiring an additional 5,119 shares during the period. Principal Financial Group Inc. lifted its holdings in Darden Restaurants by 5.1% during the 1st quarter. Principal Financial Group Inc. now owns 162,340 shares of the restaurant operator's stock valued at $33,728,000 after purchasing an additional 7,902 shares during the last quarter. Golden State Wealth Management LLC boosted its position in Darden Restaurants by 12.4% during the first quarter. Golden State Wealth Management LLC now owns 924 shares of the restaurant operator's stock worth $192,000 after purchasing an additional 102 shares during the period. Finally, GAMMA Investing LLC increased its holdings in shares of Darden Restaurants by 124.2% in the first quarter. GAMMA Investing LLC now owns 4,471 shares of the restaurant operator's stock valued at $929,000 after purchasing an additional 2,477 shares during the last quarter. 93.64% of the stock is currently owned by institutional investors and hedge funds.

Wall Street Analysts Forecast Growth

A number of research firms have issued reports on DRI. Oppenheimer upped their target price on shares of Darden Restaurants from $230.00 to $250.00 and gave the company an "outperform" rating in a research report on Wednesday, June 18th. Melius Research raised shares of Darden Restaurants to a "hold" rating in a research note on Monday, July 14th. Barclays upped their target price on shares of Darden Restaurants from $235.00 to $255.00 and gave the company an "overweight" rating in a research report on Monday, June 23rd. Wells Fargo & Company raised their price target on Darden Restaurants from $200.00 to $225.00 and gave the stock an "equal weight" rating in a research report on Tuesday, June 17th. Finally, Melius started coverage on Darden Restaurants in a report on Monday, July 14th. They issued a "hold" rating and a $240.00 price objective for the company. Sixteen research analysts have rated the stock with a Buy rating and eleven have issued a Hold rating to the company's stock. According to data from MarketBeat, Darden Restaurants has a consensus rating of "Moderate Buy" and an average target price of $225.19.

Darden Restaurants Stock Up 0.3%

Shares of Darden Restaurants stock traded up $0.65 on Monday, hitting $210.79. The company had a trading volume of 1,199,014 shares, compared to its average volume of 1,289,910. The stock has a 50-day moving average of $208.36 and a 200-day moving average of $205.40. 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 has a twelve month low of $153.98 and a twelve month high of $228.27. The firm has a market capitalization of $24.58 billion, a P/E ratio of 23.74, a P/E/G ratio of 1.93 and a beta of 0.71.

Darden Restaurants (NYSE:DRI - Get Free Report) last announced its earnings results on Friday, June 20th. The restaurant operator reported $2.98 earnings per share for the quarter, topping analysts' consensus estimates of $2.97 by $0.01. The firm had revenue of $3.27 billion during the quarter, compared to analyst estimates of $3.25 billion. Darden Restaurants had a net margin of 8.69% and a return on equity of 51.81%. The company's revenue for the quarter was up 10.6% compared to the same quarter last year. During the same period in the prior year, the business earned $2.65 EPS. Darden Restaurants has set its FY 2026 guidance at 10.500-10.700 EPS. Research analysts predict that Darden Restaurants will post 9.52 earnings per share for the current year.

Darden Restaurants announced that its Board of Directors has initiated a stock repurchase plan on Friday, June 20th that allows the company to repurchase $1.00 billion in outstanding shares. This repurchase authorization allows the restaurant operator to repurchase up to 3.8% of its stock through open market purchases. Stock repurchase plans are often a sign that the company's management believes its shares are undervalued.

Darden Restaurants Increases Dividend

The firm also recently declared a quarterly dividend, which was paid on Friday, August 1st. Stockholders of record on Thursday, July 10th were paid a dividend of $1.50 per share. The ex-dividend date of this dividend was Thursday, July 10th. This represents a $6.00 annualized dividend and a dividend yield of 2.8%. This is an increase from Darden Restaurants's previous quarterly dividend of $1.40. Darden Restaurants's dividend payout ratio (DPR) is 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.

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