Darden Restaurants (DRI) AI Stock Analysis

• Market Cap: $26.07B
• Dividend Yield: 2.51%
• Average Volume (3M): 1.60M
• Price to Earnings (P/E): 25.1
• Beta (1Y): 0.53
• Revenue Growth: 5.00%
• EPS Growth: 3.73%
• Country: US
• Employees: 191,105
• Sector: Consumer Cyclical
• Sector Strength: 56
• Industry: Restaurants
• EPS (TTM): 2.98
• Shares Outstanding: 117,026,245
• 10 Day Avg. Volume: 1,372,322
• 30 Day Avg. Volume: 1,604,000
• PEG Ratio: 2.49
• Price to Book (P/B): 8.93
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 20.66
• Enterprise Value/Market Cap: 0.91
• Enterprise Value/Revenue: 0.52
• Enterprise Value/Gross Profit: 6.09
• Enterprise Value/Ebitda: 3.27
• 1Y Price Target: $227.59
• Price Target Upside: 2.17% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 22

• Rating: 79 Outperform
• Price Target: $255.00 ▲(14.48%Upside)

Darden Restaurants scores strongly due to robust financial performance and positive earnings guidance, indicating solid future prospects. While technical indicators suggest bullish momentum, valuation concerns and potential overbought conditions warrant caution. Corporate events reinforce the company's strategic direction and shareholder focus.

Positive Factors

Advertising Impact

New Olive Garden advertising promoting delivery, specifically a free delivery offer for the first 1MM customers, is expected to drive incremental orders.

Financial Performance

Analyst raises the 4QF25 EPS estimate, indicating improved financial performance.

Sales Growth

Olive Garden is benefitting from delivery services, even before fully implementing marketing.

Negative Factors

Conservative Guidance

Despite positive momentum, Darden Restaurants is expected to guide F26 growth conservatively, in line with the long-term framework.

Food Costs

Food costs are likely to be a bit of a headwind, although greater fixed cost leverage could help offset this.

Valuation Concerns

The valuation remains stretched at several turns above its historical average.

Darden Restaurants Business Overview & Revenue Model

Company Description

Darden Restaurants, Inc., through its subsidiaries, owns and operates full-service restaurants in the United States and Canada. As of May 29, 2022, it owned and operated 1,867 restaurants, which included 884 under the Olive Garden brand, 546 under the LongHorn Steakhouse brand name, 172 under the Cheddar's Scratch Kitchen brand, 85 under the Yard House brand name, 62 under The Capital Grille brand, 45 under the Seasons 52 brand name, 42 under the Bahama Breeze brand, 28 under the Eddie V's Prime Seafood brand name, and 3 under the Capital Burger brand; and franchised 60 restaurants comprising 35 under the Olive Garden brand, 18 under the LongHorn Steakhouse brand name, 4 under the Cheddar's Scratch Kitchen brand, 2 under The Capital Grille brand name, and 1 under the Bahama Breeze brand.Darden Restaurants, Inc. was founded in 1968 and is based in Orlando, Florida.

How the Company Makes Money

Darden Restaurants generates revenue primarily through the operation of its restaurant chains. The company's income is driven by sales of food and beverages at its numerous locations, with a significant emphasis on providing quality dining experiences that encourage repeat customer visits. Key revenue streams include in-restaurant dining, takeout, and delivery services. Darden leverages its strong brand portfolio to attract a broad customer base, which contributes to steady foot traffic and sales. Additionally, the company benefits from economies of scale in procurement and efficient supply chain management, enhancing profitability. Strategic marketing initiatives and loyalty programs also play a role in driving revenue growth by increasing brand visibility and customer retention.

Darden Restaurants Financial Statement Overview

Summary

Darden Restaurants shows strong financial health with robust revenue growth, an improved gross profit margin, and solid profitability. The balance sheet is stable, although moderate leverage is present. Cash flow metrics are healthy, indicating strong cash generation capabilities.

Income Statement

Darden Restaurants shows strong revenue growth with a notable increase in Total Revenue from $11.39B to $11.76B TTM, reflecting a healthy Revenue Growth Rate of 3.26%. Gross Profit Margin improved significantly to 33.31% TTM, indicating efficient cost management. Net Profit Margin also saw a positive trend, reaching 8.96% TTM, showcasing solid profitability. EBIT and EBITDA Margins of 11.81% and 15.91% respectively underline robust operational performance.

Balance Sheet

The company's balance sheet is stable, with a Debt-to-Equity Ratio of 2.76, indicating a moderate level of leverage. The Equity Ratio remains consistent at 17.54% TTM, suggesting a solid equity base. Return on Equity stood at 47.84% TTM, showcasing strong profitability relative to shareholder equity, although the high leverage might pose a risk in volatile markets.

Cash Flow

Darden Restaurants demonstrates healthy cash flow metrics with a Free Cash Flow Growth Rate of 3.56% TTM, indicating strong cash generation capabilities. Operating Cash Flow to Net Income Ratio of 1.59 and Free Cash Flow to Net Income Ratio of 0.98 underline efficient conversion of income into cash, supporting liquidity and potential for reinvestment or debt reduction.

Breakdown
TTM	Jun 2024	Jun 2023	Jun 2022	Jun 2021	Jun 2020
Income Statement		Total Revenue
11.76B	11.39B	10.49B	9.63B	7.20B	7.81B
	Gross Profit
3.92B	2.41B	2.08B	2.00B	1.49B	1.41B
	EBIT
1.39B	1.31B	1.20B	1.16B	648.70M	828.30M
	EBITDA
1.87B	1.78B	1.59B	1.54B	993.40M	257.00M
	Net Income Common Stockholders
1.05B	1.03B	981.90M	952.80M	629.30M	-49.20M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
224.20M	194.80M	367.80M	420.60M	1.21B	763.30M
	Total Assets
12.56B	11.32B	10.24B	10.14B	10.66B	9.95B
	Total Debt
6.08B	5.43B	4.55B	4.86B	5.02B	5.48B
	Net Debt
5.86B	5.23B	4.18B	4.44B	3.80B	4.71B
	Total Liabilities
10.36B	9.08B	8.04B	7.94B	7.84B	7.61B
	Stockholders Equity
2.20B	2.24B	2.20B	2.20B	2.81B	2.33B
Cash Flow		Free Cash Flow
1.03B	993.40M	951.80M	857.00M	924.90M	217.30M
	Operating Cash Flow
1.67B	1.62B	1.55B	1.26B	1.19B	711.30M
	Investing Cash Flow
-1.27B	-1.32B	-568.40M	-389.00M	-263.70M	-544.00M
	Financing Cash Flow
-448.80M	-483.40M	-1.03B	-1.61B	-478.90M	138.70M

Darden Restaurants Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 222.75
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For DRI, the sentiment is Positive. The current price of 222.75 is above the 20-day moving average (MA) of 215.54, above the 50-day MA of 206.57, and above the 200-day MA of 183.56, indicating a bullish trend. The MACD of 4.61 indicates Negative momentum. The RSI at 65.98 is Neutral, neither overbought nor oversold. The STOCH value of 80.76 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for DRI.

Darden Restaurants Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
DRI	79 Outperform	$26.07B	25.13	48.22%	2.51%	5.00%	3.73%
TXRH	76 Outperform	$12.80B	29.75	33.55%	1.41%	15.09%	31.24%
CAKE	74 Outperform	$2.92B	18.52	46.60%	1.83%	4.42%	48.23%
EAT	73 Outperform	$7.93B	24.60	314.08%	―	19.80%	117.96%
YUM	66 Neutral	$38.46B	27.59	-19.43%	2.05%	10.09%	-11.50%
PZZA	65 Neutral	$1.60B	20.75	-20.16%	3.76%	-2.77%	4.01%
Sector *	62 Neutral	$6.80B	11.08	2.79%	5.80%	2.68%	-24.86%

Darden Restaurants Corporate Events

Darden Restaurants Reports Strong Q4 and Dividend Increase

On June 13, 2025, Dan Kiernan, President of Olive Garden, announced his retirement effective August 31, 2025, with John Wilkerson set to succeed him on September 1, 2025. Darden Restaurants reported a strong fiscal fourth quarter and year-end for 2025, with a 10.6% increase in total sales driven by same-restaurant sales growth and acquisitions. The company also declared a 7.1% increase in its quarterly dividend and authorized a new $1 billion share repurchase program, reflecting its robust financial health and commitment to shareholder value.

The most recent analyst rating on (DRI) stock is a Hold with a $210.00 price target. To see the full list of analyst forecasts on Darden Restaurants stock, see the DRI Stock Forecast page.