Darden Restaurants, Inc. (DRI) Lifted to Hold at Zacks Investment Research

Zacks Investment Research upgraded shares of Darden Restaurants, Inc. (NYSE:DRI) from a sell rating to a hold rating in a research note released on Monday, November 6th.

According to Zacks, “Most of Darden’s brands have witnessed growth over the past few quarters given various sales initiatives like simplifying kitchen systems, operational excellence, menu innovation along with technology-driven moves. The acquisition of Cheddar's has added an undisputed casual dining value leader to Darden's portfolio of differentiated brands, which is expected to further drive comps. Initiatives to attract guests at Olive Garden, LongHorn and other units also bode well. Further, it’s efforts to check costs are commendable. Backed by these efforts, Darden’s first-quarter fiscal 2018 earnings topped the Zacks Consensus Estimate for the 12th consecutive quarter. However, Darden’s shares have underperformed the industry over the past six months. Going forward, rising labor costs and a non-franchised business model are likely to dampen the company’s profits, while a soft industry backdrop might pressurize comps.”

A number of other research firms also recently weighed in on DRI. BidaskClub downgraded Darden Restaurants from a strong-buy rating to a buy rating in a report on Sunday, July 16th. Raymond James Financial, Inc. restated a market perform rating on shares of Darden Restaurants in a research note on Monday, July 24th. Robert W. Baird restated a hold rating and issued a $94.00 price target on shares of Darden Restaurants in a research note on Tuesday, September 19th. Oppenheimer Holdings, Inc. restated a buy rating and issued a $100.00 price target on shares of Darden Restaurants in a research note on Wednesday, September 20th. Finally, Wells Fargo & Company cut their price target on Darden Restaurants from $90.00 to $84.00 and set a market perform rating on the stock in a research note on Wednesday, September 27th. One research analyst has rated the stock with a sell rating, seventeen have given a hold rating and nine have given a buy rating to the company. Darden Restaurants has an average rating of Hold and an average target price of $87.59.

Darden Restaurants (NYSE DRI) traded up $0.48 during midday trading on Monday, hitting $82.81. The stock had a trading volume of 686,275 shares, compared to its average volume of 1,316,884. Darden Restaurants has a 12 month low of $71.01 and a 12 month high of $95.22. The company has a debt-to-equity ratio of 0.45, a quick ratio of 0.24 and a current ratio of 0.38. The company has a market cap of $10,241.36, a price-to-earnings ratio of 20.05, a PEG ratio of 1.81 and a beta of 0.22.

Darden Restaurants (NYSE:DRI) last released its quarterly earnings results on Tuesday, September 26th. The restaurant operator reported $0.99 EPS for the quarter, meeting analysts’ consensus estimates of $0.99. Darden Restaurants had a return on equity of 26.06% and a net margin of 6.60%. The business had revenue of $1.94 billion during the quarter, compared to analyst estimates of $1.93 billion. During the same quarter in the prior year, the company posted $0.88 EPS. Darden Restaurants’s quarterly revenue was up 12.9% compared to the same quarter last year. sell-side analysts anticipate that Darden Restaurants will post 4.43 earnings per share for the current year.

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The company also recently disclosed a quarterly dividend, which was paid on Wednesday, November 1st. Shareholders of record on Tuesday, October 10th were given a $0.63 dividend. The ex-dividend date of this dividend was Friday, October 6th. This represents a $2.52 dividend on an annualized basis and a dividend yield of 3.04%. Darden Restaurants’s dividend payout ratio (DPR) is currently 65.12%.

Several institutional investors and hedge funds have recently added to or reduced their stakes in the stock. IFM Investors Pty Ltd acquired a new position in shares of Darden Restaurants during the 3rd quarter worth about $336,000. Guardian Capital LP raised its position in shares of Darden Restaurants by 140.4% during the 3rd quarter. Guardian Capital LP now owns 8,569 shares of the restaurant operator’s stock worth $675,000 after purchasing an additional 5,005 shares during the last quarter. Piedmont Investment Advisors LLC raised its position in shares of Darden Restaurants by 3.6% during the 3rd quarter. Piedmont Investment Advisors LLC now owns 68,416 shares of the restaurant operator’s stock worth $5,390,000 after purchasing an additional 2,362 shares during the last quarter. California Public Employees Retirement System raised its position in shares of Darden Restaurants by 6.4% during the 3rd quarter. California Public Employees Retirement System now owns 285,173 shares of the restaurant operator’s stock worth $22,466,000 after purchasing an additional 17,273 shares during the last quarter. Finally, Janney Montgomery Scott LLC raised its position in shares of Darden Restaurants by 12.6% during the 3rd quarter. Janney Montgomery Scott LLC now owns 12,338 shares of the restaurant operator’s stock worth $972,000 after purchasing an additional 1,379 shares during the last quarter. Hedge funds and other institutional investors own 88.32% of the company’s stock.

About Darden Restaurants

Darden Restaurants, Inc is a full-service restaurant company. The Company owned and operated 1,536 restaurants through its subsidiaries in the United States and Canada, as of May 29, 2016. The Company’s segments include Olive Garden, LongHorn Steakhouse, Fine Dining (which includes The Capital Grille, and Eddie V’s Prime Seafood and Wildfish Seafood Grille (Eddie V’s)) and Other Business (which includes Yard House, Seasons 52, Bahama Breeze, consumer-packaged goods and franchise revenues).

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Analyst Recommendations for Darden Restaurants (NYSE:DRI)

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