DailyIQ
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Sector:Consumer CyclicalAll sectors
Last updated 5 minutes ago

DRI·Darden Restaurants, Inc.

$.
-. (-.%)
After Hours
High
$203.00
Open
$202.60
Market Cap
23.16B
52W High
$220.65
Low
$197.71
P. Close
$198.42
P/E
19.19
52W Low
$169.00
Fwd P/E
98.10
DailyIQ Est.
$235.36
Technical Score (1D)
55
BUY
News Sentiment
70
BULLISH
Darden Restaurants (DRI) has recently demonstrated strong profit growth and a 20.9 % return on invested capital, underscoring its efficient capital use and solid cash conversion that supports future dividends. These metrics reinforce a bullish thesis supported by favorable P/E ratios, as analysts note DRI’s trailing P/E of 19.34 and forward P/E of 17.92, suggesting upside potential. The company’s earnings growth, combined with cash returns and a lower valuation multiple, points to a possible reset, though recent estimate cuts and persistent inflationary pressures temper enthusiasm. LongHorn’s expansion and new digital initiatives are expected to boost revenue, but inflation and cautious consumer spending could compress margins, adding a risk layer to the growth narrative. Analysts from Argus Research and Piper Sandler have raised their price targets to $245 and $212 respectively, and Piper Sandler noted DRI’s ex‑dividend date of July 10, citing sustained traffic strength and confidence in the earnings trajectory. Bank of America trimmed its target to $274, citing modest concerns about margins, while JPMorgan lifted its target to $225 on the back of improved margin expectations and a favorable competitive landscape. DRI’s record sales and new restaurant openings led to its removal from several Russell indexes, and bylaw changes alter shareholder director nominations, potentially affecting governance and index exposure. Bank of America analysts highlighted a demand inflection point in Q4, noting persistent demand trends that may signal a shift in consumer dining patterns. The company’s recent run toward a 12‑month high has brought valuation metrics above the industry median, prompting analysts to monitor guidance for the upcoming quarter and any changes in cost structure. With margin expansion driven by inflation mitigation, strong cash flow supporting share repurchases, and a focus on cost control and menu pricing, DRI’s next earnings cycle will be crucial to confirm the trajectory and assess the impact of these initiatives.
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
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Market Data

DRI Stock Snapshot

DRI is currently trading at $198.53, giving Darden Restaurants, Inc. a market cap of 23.16B and a P/E ratio of 19.2. Today's range spans $197.71–$203.00, with shares opening at $202.60 and moving up $0.11 (0.1%) from the prior close. DailyIQ's technical score sits at 55/100 (HOLD) with a news sentiment reading of 70/100.

Over the past year DRI has traded between $169.00 and $220.65 - the current price is +17.5% off the 52-week low and -10.0% from the high. 35 analysts cover the stock with a Hold consensus and a mean 12-month target of $228.25 (range $156.00–$274.00), implying upside of +15.0%.

DRI is in consolidation mode: 55/100 technical score (HOLD), bullish sentiment at 70/100, price at $198.53 (in the middle of its 52-week range within $169.00–$220.65). The current P/E ratio stands at 19.2. The 23.16B market cap in Consumer Cyclical means the stock is widely covered and any shift in analyst sentiment or earnings expectations will be immediately reflected in price - making the current neutral phase a good time to track upcoming catalysts closely.

In neutral phases, large-cap Consumer Cyclical names like DRI are often where sector rotation debates play out quietly — at 23.16B in capitalization, the stock receives incremental allocation from funds reducing mega-cap exposure without the volatility of a small-cap entry. The 55/100 (HOLD) and bullish sentiment (70/100) at $198.53 (in the middle of its 52-week range) describe a stock that is being considered rather than avoided.