Darden price target raised to $178 from $165 at Stifel

Stifel analyst Chris O’Cull raised the firm’s price target on Darden to $178 from $165 and keeps a Buy rating on the shares after the company reported fiscal Q4 EPS above the firm’s estimate and the Street mean, driven by better-than-expected restaurant profits and a lower tax rate. The FY24 same-restaurant sales guidance was “more aggressive than we expected” given weak casual dining segment traffic, but the company has not seen a material shift in consumer behavior in its core brands so the range should be achievable if consumer spending remains stable, says the firm. The results support the thesis that Darden’s scale and operational sophistication will widen its comp sales growth and margin gap with its competition, the analyst added.