Darden Restaurants (DRI) Raised to “Buy” at Zacks Investment Research
Zacks Investment Research upgraded shares of Darden Restaurants (NYSE:DRI) from a hold rating to a buy rating in a report issued on Thursday morning. Zacks Investment Research currently has $98.00 price target on the restaurant operator’s stock.
According to Zacks, “Darden’s shares outpaced its industry so far this year. Most of its brands have witnessed growth over the past few quarters, given various sales initiatives like simplifying kitchen systems, operational excellence to enhance guest experience, 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, Darden’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. Yet, 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 equities research analysts also recently issued reports on DRI. Canaccord Genuity reiterated a buy rating and set a $97.00 price target on shares of Darden Restaurants in a research report on Wednesday, September 27th. Morgan Stanley reiterated an equal weight rating and set a $88.00 price target (down from $93.00) on shares of Darden Restaurants in a research report on Wednesday, September 27th. BMO Capital Markets reiterated a market perform rating and set a $85.00 price target (down from $87.00) on shares of Darden Restaurants in a research report on Wednesday, September 27th. Wells Fargo & Company reduced their price target on shares of Darden Restaurants from $90.00 to $84.00 and set a market perform rating for the company in a research report on Wednesday, September 27th. Finally, Royal Bank of Canada reduced their price target on shares of Darden Restaurants from $96.00 to $90.00 and set a sector perform rating for the company in a research report on Wednesday, September 27th. One analyst has rated the stock with a sell rating, sixteen have assigned a hold rating and nine have issued a buy rating to the company. Darden Restaurants currently has a consensus rating of Hold and an average price target of $88.91.
Darden Restaurants (NYSE:DRI) last posted its quarterly earnings results on Tuesday, September 26th. The restaurant operator reported $0.99 earnings per share (EPS) for the quarter, meeting the Zacks’ consensus estimate of $0.99. Darden Restaurants had a net margin of 6.60% and a return on equity of 26.06%. The company had revenue of $1.94 billion during the quarter, compared to the consensus estimate of $1.93 billion. During the same period last year, the firm earned $0.88 EPS. The company’s revenue for the quarter was up 12.9% on a year-over-year basis. sell-side analysts anticipate that Darden Restaurants will post 4.44 earnings per share for the current year.
The business also recently disclosed a quarterly dividend, which will be paid on Thursday, February 1st. Investors of record on Wednesday, January 10th will be given a dividend of $0.63 per share. The ex-dividend date is Tuesday, January 9th. This represents a $2.52 annualized dividend and a dividend yield of 2.85%. Darden Restaurants’s dividend payout ratio is currently 64.62%.
Several institutional investors have recently modified their holdings of the stock. Sei Investments Co. grew its stake in Darden Restaurants by 217.6% in the 2nd quarter. Sei Investments Co. now owns 38,082 shares of the restaurant operator’s stock worth $3,444,000 after acquiring an additional 26,090 shares during the period. Retirement Systems of Alabama grew its stake in Darden Restaurants by 0.4% in the 2nd quarter. Retirement Systems of Alabama now owns 60,287 shares of the restaurant operator’s stock worth $5,452,000 after acquiring an additional 268 shares during the period. Global X Management Co. LLC grew its stake in Darden Restaurants by 4.8% in the 2nd quarter. Global X Management Co. LLC now owns 5,582 shares of the restaurant operator’s stock worth $505,000 after acquiring an additional 254 shares during the period. Schwab Charles Investment Management Inc. grew its stake in Darden Restaurants by 28.4% in the 2nd quarter. Schwab Charles Investment Management Inc. now owns 1,018,246 shares of the restaurant operator’s stock worth $92,091,000 after acquiring an additional 225,165 shares during the period. Finally, Wedbush Securities Inc. grew its stake in Darden Restaurants by 0.5% in the 2nd quarter. Wedbush Securities Inc. now owns 3,195 shares of the restaurant operator’s stock worth $289,000 after acquiring an additional 15 shares during the period. Hedge funds and other institutional investors own 91.94% of the company’s stock.
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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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