DailyIQ
|
Sector:Consumer CyclicalAll sectors
Last updated 3 minutes ago

DRI·Darden Restaurants, Inc.

$.
-. (-.%)
High
$200.11
Open
$198.74
Market Cap
22.74B
52W High
$220.65
Low
$192.30
P. Close
$198.53
P/E
18.84
52W Low
$169.00
Fwd P/E
96.79
DailyIQ Est.
$235.56
Technical Score (1D)
27
SELL
News Sentiment
67
BULLISH
Strong profit growth and a 20.9 % return on invested capital indicate efficient capital use, which should bolster earnings momentum in the next few trading days, so traders should keep an eye on the upcoming earnings release for confirmation. Solid cash conversion underpins Darden’s ability to fund dividends and share repurchases, which could temper volatility as investors anticipate a potential buyback push. Earlier guidance from Piper Sandler, citing sustained traffic growth, raised DRI’s target price to $212, reinforcing confidence that customer flow will continue to support revenue, so watch traffic metrics in the next earnings cycle. Argus Research’s price target lift to $245 reflects belief in menu innovation driving margin expansion, suggesting that any further menu tweaks could lift profitability, so monitor menu rollout announcements. Bank of America’s modest $2 trim to a $274 target signals slight margin concerns, indicating that if cost pressures widen the valuation could tighten, so watch cost‑control updates. The removal from Russell indexes after record sales and new restaurant openings may reduce passive exposure, potentially dampening support from index funds, so watch index reconstitution data. BofA analysts noted a demand inflection point in Q4, implying that consumer dining patterns may shift, so traders should monitor consumer sentiment surveys for signs of changing preferences. UBS’s forecast of steady core sales through fiscal 2027 provides a backdrop of limited downside risk, so watch the full‑year guidance for any revisions that could alter that outlook. Finally, the company’s recent share repurchase program, driven by strong cash flow, could create upward pressure on the stock if the buyback pace accelerates, so keep an eye on quarterly buyback disclosures.
Earnings Summary
Darden Restaurants, Inc. operates a portfolio of full‑service dining brands such as Olive Garden, LongHorn Steakhouse, and Cheddar's Scratch Kitchen, positioning it as a leading player in the North American casual dining sector. In the most recent fiscal year, the company delivered Q1 2025 revenue of $3.16 billion and EPS of $2.80, narrowly beating estimates of $2.79538, while Q2 2025 saw revenue rise to $3.27 billion and EPS of $2.98, again surpassing the $2.9669 forecast; however, the subsequent quarters reversed this trend, with Q3 2025 revenue falling to $3.05 billion and EPS of $1.97, missing the $2.01115 estimate, and Q4 2025 revenue modestly climbing to $3.10 billion but EPS of $2.08 falling short of the $2.09721 target, indicating a deceleration in both top‑line growth and earnings momentum over the last two quarters relative to the first two. Historically, Darden’s earnings have shown volatility, with early‑year beats followed by late‑year misses, and revenue growth has slowed from a 3.5% increase in Q1 to Q2 to a 6.5% decline in Q3, suggesting a pattern of fluctuating performance that has not yet stabilized into a consistent upward trajectory. Recent news highlights a 20.9% return on invested capital and robust profit expansion, underscoring effective menu and cost‑control initiatives, while analysts note that inflationary pressures and margin compression remain concerns; the company’s focus on LongHorn expansion, digital initiatives, and new restaurant openings is expected to drive future revenue, yet cost‑management updates will be critical to sustaining margins. Investors should watch for any guidance revisions that could signal margin compression, monitor the company’s cost‑control updates and digital rollout, and keep an eye on capital allocation decisions such as dividend or buyback plans, as these factors will likely shape the next earnings cycle and influence valuation sentiment.

EPS

EstBeatMiss
$1.82$2.15$2.48$2.80$3.13Q2'25Q3'25Q4'25Q2'26Q3'26Q1'27
QtrEstActual+/−
Q1'27$2.05 - -
Q3'26$2.94$2.95+0.3%
Q2'26$2.12$2.08-2.0%
Q4'25$2.10$2.08-0.8%
Q3'25$2.01$1.97-2.0%
Q2'25$2.97$2.98+0.4%

Revenue

EstBeatMiss
$3.0B$3.1B$3.2B$3.3B$3.4BQ2'25Q3'25Q4'25Q2'26Q3'26Q1'27
QtrEstActual+/−
Q1'27$3.2B - -
Q3'26$3.3B$3.3B+0.4%
Q2'26$3.1B$3.1B+0.0%
Q4'25 - $3.1B -
Q3'25 - $3.0B -
Q2'25 - $3.3B -
Full Earnings BreakdownEstimates, actuals, guidance, and historical context
→

Market Data

DRI Stock Snapshot

DRI is currently trading at $193.84, giving Darden Restaurants, Inc. a market cap of 22.74B and a P/E ratio of 18.8. Today's range spans $192.30–$200.11, with shares opening at $198.74 and moving down $4.69 (2.4%) from the prior close. DailyIQ's technical score sits at 27/100 (SELL) with a news sentiment reading of 67/100.

Over the past year DRI has traded between $169.00 and $220.65 - the current price is +14.7% off the 52-week low and -12.2% from the high. 35 analysts cover the stock with a Hold consensus and a mean 12-month target of $228.33 (range $156.00–$276.00), implying upside of +17.8%.

DRI is showing a SELL signal (27/100) with bullish sentiment (67/100). Price: $193.84 (in the middle of its 52-week range within $169.00–$220.65). (P/E: 18.8) At 22.74B in Consumer Cyclical market cap, a bearish technical read accompanied by negative sentiment often marks the beginning of an earnings revision cycle downward - active managers trim before the revisions become consensus, compounding the selling pressure.

Analyst coverage for DRI becomes a double-edged factor in a SELL phase: at 22.74B in Consumer Cyclical market cap, active coverage is high enough that downgrade risk is real and impactful. The 27/100 technical reading and bullish sentiment (67/100) at $193.84 (in the middle of its 52-week range) place the stock in the zone where one or two high-profile estimate cuts can convert a grinding decline into a sharper re-rating — the $169.00–$220.65 range establishes where that repricing lands.