According to Zacks, “Shares of Darden have outperformed the industry in a year. Darden’s earnings met/surpassed the Zacks Consensus Estimate for 18 straight quarters. Estimates for current quarter and year have increased over the past 60 days. Backed by its various sales initiatives and technology-driven moves, the top line is likely to improve in the months ahead. The company’s efforts to check costs are commendable. In fiscal 2018, management realized roughly $10 million of cost synergies and expects to realize the same in the range of $22-$27 million by the end of fiscal 2019. Further, the Cheddar's buyout has added value to Darden's portfolio of differentiated brands. Current-year earnings estimates have also moved north over the past month. However, fierce competition and softer-than-expected consumer demand might keep comps under pressure. Also, rising labor costs and a non-franchised business model may dampen profits.”
A number of other brokerages also recently issued reports on DRI. Wells Fargo & Co increased their price target on Darden Restaurants from $110.00 to $120.00 and gave the stock a “market perform” rating in a research report on Friday, March 22nd. Mizuho increased their price target on Darden Restaurants from $125.00 to $130.00 and gave the stock a “buy” rating in a research report on Friday, March 22nd. Morgan Stanley increased their price target on Darden Restaurants from $112.00 to $121.00 and gave the stock an “equal weight” rating in a research report on Friday, March 22nd. Citigroup raised their target price on Darden Restaurants from $120.00 to $146.00 and gave the company a “buy” rating in a research report on Wednesday, April 3rd. Finally, SunTrust Banks raised their target price on Darden Restaurants to $141.00 and gave the company a “buy” rating in a research report on Friday, March 22nd. One investment analyst has rated the stock with a sell rating, seven have issued a hold rating and eighteen have issued a buy rating to the stock. The company has a consensus rating of “Buy” and an average target price of $129.38.
Darden Restaurants (NYSE:DRI) last issued its quarterly earnings results on Thursday, March 21st. The restaurant operator reported $1.80 earnings per share (EPS) for the quarter, topping analysts’ consensus estimates of $1.75 by $0.05. The company had revenue of $2.25 billion for the quarter, compared to the consensus estimate of $2.24 billion. Darden Restaurants had a return on equity of 30.28% and a net margin of 8.08%. Darden Restaurants’s revenue for the quarter was up 5.5% on a year-over-year basis. During the same quarter in the prior year, the business posted $1.71 earnings per share. On average, research analysts predict that Darden Restaurants will post 5.78 earnings per share for the current fiscal year.
In other news, insider Eugene I. Lee, Jr. sold 73,152 shares of Darden Restaurants stock in a transaction on Monday, March 25th. The stock was sold at an average price of $118.61, for a total value of $8,676,558.72. Following the completion of the sale, the insider now directly owns 190,025 shares of the company’s stock, valued at $22,538,865.25. The sale was disclosed in a legal filing with the Securities & Exchange Commission, which is available at this link. Also, SVP John W. Madonna sold 330 shares of Darden Restaurants stock in a transaction on Monday, March 25th. The shares were sold at an average price of $118.76, for a total value of $39,190.80. Following the completion of the sale, the senior vice president now directly owns 1,680 shares of the company’s stock, valued at $199,516.80. The disclosure for this sale can be found here. Insiders own 0.65% of the company’s stock.
Several hedge funds and other institutional investors have recently modified their holdings of DRI. Millennium Management LLC boosted its holdings in Darden Restaurants by 57.6% in the fourth quarter. Millennium Management LLC now owns 539,124 shares of the restaurant operator’s stock valued at $53,837,000 after purchasing an additional 197,092 shares during the period. BRITISH COLUMBIA INVESTMENT MANAGEMENT Corp boosted its holdings in Darden Restaurants by 9.4% in the fourth quarter. BRITISH COLUMBIA INVESTMENT MANAGEMENT Corp now owns 42,045 shares of the restaurant operator’s stock valued at $4,199,000 after purchasing an additional 3,614 shares during the period. Granite Investment Advisors LLC boosted its holdings in Darden Restaurants by 24.2% in the fourth quarter. Granite Investment Advisors LLC now owns 3,905 shares of the restaurant operator’s stock valued at $390,000 after purchasing an additional 760 shares during the period. Northpointe Capital LLC boosted its holdings in Darden Restaurants by 76.4% in the first quarter. Northpointe Capital LLC now owns 32,296 shares of the restaurant operator’s stock valued at $3,923,000 after purchasing an additional 13,991 shares during the period. Finally, Apertura Capital LLC purchased a new position in Darden Restaurants in the fourth quarter valued at $5,992,000. 91.17% of the stock is owned by institutional investors and hedge funds.
About Darden Restaurants
Darden Restaurants, Inc, through its subsidiaries, owns and operates full-service restaurants in the United States and Canada. As of May 27, 2018, it owned and operated approximately 1,746 restaurants under the Olive Garden, LongHorn Steakhouse, Cheddar's Scratch Kitchen, Yard House, The Capital Grille, Bahama Breeze, Seasons 52, and Eddie V's brands.
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