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Darden Restaurants
(NYSE:DRI)
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Rating:69Neutral
Price Target:
$219.00
â–²(0.09% Upside)
Action:Reiterated
Date:09/28/26
The score is driven primarily by solid fundamentals (healthy margins, steady growth, and strong free cash flow) and a constructive earnings outlook with reaffirmed guidance. Offsetting these positives are elevated balance-sheet leverage and notably weak current technical momentum (price below key moving averages with negative MACD and low RSI). Valuation is supportive with a moderate P/E and ~3% dividend yield.
Positive Factors
Consistent sales growth across a broad restaurant portfolio
Positive comparable sales across every segment, combined with new restaurant additions, shows that Darden is growing through both established-brand demand and unit expansion. This diversified growth base can support a steadily rising earnings platform over the next several quarters.
Negative Factors
Elevated leverage reduces financial flexibility
Debt materially exceeds equity, making Darden more sensitive to weaker consumer demand, higher interest costs, or refinancing conditions. Although profitability is strong, elevated leverage can restrict capital-allocation flexibility and leave less room to absorb prolonged operating pressure.
Read all positive and negative factors
Positive Factors
Negative Factors
Consistent sales growth across a broad restaurant portfolio
Positive comparable sales across every segment, combined with new restaurant additions, shows that Darden is growing through both established-brand demand and unit expansion. This diversified growth base can support a steadily rising earnings platform over the next several quarters.
Read all positive factors
Darden Restaurants Key Performance Indicators (KPIs)
Any
Profit by Segment
Analyzes profitability across different business segments, highlighting which areas drive earnings and where there might be challenges or opportunities for growth.
Analyzes profitability across different business segments, highlighting which areas drive earnings and where there might be challenges or opportunities for growth.
Data provided by:
The Fly
The FlyDarden Restaurants (DRI) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$21.94B
Dividend Yield3.1%
Average Volume (3M)1.15M
Price to Earnings (P/E)19.0
Beta (1Y)0.53
Revenue Growth8.10%
EPS Growth9.77%
CountryUS
Employees209,931
SectorConsumer Cyclical
Sector Strength84
IndustryRestaurants
Share Statistics
EPS (TTM)10.30
Shares Outstanding113,541,756
10 Day Avg. Volume1,564,022
30 Day Avg. Volume1,150,816
Financial Highlights & Ratios
PEG Ratio1.13
Price to Book (P/B)10.45
Price to Sales (P/S)1.75
P/FCF Ratio20.62
Enterprise Value/Market Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda<0.01
Forecast
1Y Price Target
$238.00Price Target Upside8.77% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering20
EPS Forecast (FY)11.28
Revenue Forecast (FY)$13.70B
Darden Restaurants Business Overview & Revenue Model
Company Description
Darden Restaurants, Inc., through its various subsidiaries, focuses on the ownership and operation of full-service dining establishments across both the United States and Canada. As of May 29, 2022, the company's extensive portfolio comprised 1,86...
How the Company Makes Money
Darden primarily makes money by operating its restaurants and selling food and beverages to guests. The company’s revenue model is largely transaction-based: each guest check (or off-premise order) generates sales, with pricing, guest traffic, men...
Darden Restaurants Earnings Call Summary
Earnings Call Date:Sep 24, 2026
(Q1-2027)
| % Change Since: |
Next Earnings Date:Dec 11, 2026
Earnings Call Sentiment Positive
The call was strongly constructive. Darden delivered sales and earnings growth in line with expectations, positive same-restaurant sales across every segment, strong momentum at LongHorn and Yard House, improving Olive Garden trends, stable consolidated restaurant-level margins, and reaffirmed full-year EPS guidance. The company also described continued investment in brands, people, digital marketing, and new restaurant growth. Offsetting challenges included industry guest-count declines, temporary World Cup and lettuce-related headwinds, Olive Garden lunch weakness, softer Fine Dining traffic and business spending, lower Fine Dining and Other Business margins, and potential fuel and beef inflation risks. Overall, the positive operating performance and outlook significantly outweighed the stated challenges.Positive Updates
Quarterly Sales and Earnings Growth Met Expectations
Darden generated $3.2 billion of total sales in the first quarter, up 5.1% from last year, driven by positive same-restaurant sales growth and the addition of 53 net new restaurants. On a comparable calendar basis, same-restaurant sales increased 3.2%. Diluted net earnings per share from continuing operations were $2.05, up 4.1% from last year's adjusted net earnings per share.
Negative Updates
Industry Guest Counts Declined
The casual dining industry benchmark reported a 2.4% increase in average same-restaurant sales but a 0.2% decrease in average same-restaurant guest counts during the first quarter.
Read all updates
Q1-2027 Updates
Positive
Negative
Quarterly Sales and Earnings Growth Met Expectations
Darden generated $3.2 billion of total sales in the first quarter, up 5.1% from last year, driven by positive same-restaurant sales growth and the addition of 53 net new restaurants. On a comparable calendar basis, same-restaurant sales increased 3.2%. Diluted net earnings per share from continuing operations were $2.05, up 4.1% from last year's adjusted net earnings per share.
Read all positive updates
Company Guidance
Darden reaffirmed all aspects of its financial outlook for fiscal 2027, including diluted net earnings per share between $11.10 and $11.35; pricing was 3.7% in the first quarter and is expected to moderate to a mid-3% range in the second quarter and to low to mid-2s by Q4, while commodities inflation is expected to be 3% for the year, 2.5% to 3% in the second quarter and closer to 3% in the back half, with beef at low single-digit inflation for fiscal 2027; Thanksgiving is expected to create an approximately 1% headwind to second quarter sales, with an offsetting benefit in the third quarter; elevated fuel prices could mean tens of basis points incremental inflation on commodities, or somewhere around 10 to 15 basis points as a percent of sales at $6-plus diesel prices for the full fiscal year; Yard House’s long-term unit growth goal is in the higher single digits, Cheddar’s should be in the mid-single digits over time, and Chuy’s should be in the high single digits, mid- to high-single-digit growth in the intermediate term and long term.Darden Restaurants Financial Statement Overview
Summary
Income Statement
78
Positive
Balance Sheet
62
Positive
Cash Flow
71
Positive
| Breakdown | TTM | May 2026 | May 2025 | May 2024 | May 2023 | May 2022 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 13.37B | 13.21B | 12.08B | 11.39B | 10.49B | 9.63B |
| Gross Profit | 9.27B | 9.17B | 2.64B | 2.43B | 2.11B | 2.00B |
| EBITDA | 2.18B | 2.34B | 1.88B | 1.78B | 1.60B | 1.53B |
| Net Income | 1.18B | 1.21B | 1.05B | 1.03B | 981.90M | 952.80M |
Balance Sheet | ||||||
| Total Assets | 13.23B | 12.86B | 12.59B | 11.32B | 10.24B | 10.14B |
| Cash, Cash Equivalents and Short-Term Investments | 220.50M | 219.50M | 240.00M | 194.80M | 367.80M | 420.60M |
| Total Debt | 6.63B | 6.05B | 6.23B | 5.43B | 4.79B | 4.89B |
| Total Liabilities | 11.16B | 10.65B | 10.28B | 9.08B | 8.04B | 7.94B |
| Stockholders Equity | 2.07B | 2.21B | 2.31B | 2.24B | 2.20B | 2.20B |
Cash Flow | ||||||
| Free Cash Flow | 1.06B | 1.12B | 1.04B | 983.60M | 951.80M | 857.00M |
| Operating Cash Flow | 1.79B | 1.85B | 1.71B | 1.61B | 1.55B | 1.26B |
| Investing Cash Flow | -723.40M | -711.40M | -1.28B | -1.32B | -568.40M | -389.00M |
| Financing Cash Flow | -1.06B | -1.16B | -385.80M | -483.40M | -1.03B | -1.61B |
Darden Restaurants Technical Analysis
Negative
218.81
Price Trends
211.68
Negative
206.20
Negative
202.12
Negative
Market Momentum
-4.50
Positive
38.60
Neutral
8.20
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For DRI, the sentiment is Negative. The current price of 218.81 is above the 20-day moving average (MA) of 207.74, above the 50-day MA of 211.68, and above the 200-day MA of 202.12, indicating a bearish trend. The MACD of -4.50 indicates Positive momentum. The RSI at 38.60 is Neutral, neither overbought nor oversold. The STOCH value of 8.20 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for DRI.
Darden Restaurants Risk Analysis
Darden Restaurants disclosed 33 risk factors in its most recent earnings report. Darden Restaurants reported the most risks in the "Production" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Darden Restaurants Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
76 Outperform | $14.08B | 14.95 | 17.84% | 2.71% | 8.78% | 12.47% | |
69 Neutral | $21.94B | 18.98 | 55.90% | 3.10% | 8.10% | 9.77% | |
68 Neutral | $10.26B | 24.91 | 27.56% | 1.87% | 9.89% | -4.85% | |
68 Neutral | $37.21B | 17.10 | -30.35% | 2.17% | 10.28% | 56.85% | |
68 Neutral | $32.31B | 17.02 | 34.86% | 3.68% | 6.51% | 40.57% | |
64 Neutral | $8.08B | 17.44 | 123.85% | 4.81% | 7.86% | 29.85% | |
61 Neutral | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% |
* Consumer Cyclical Sector Average
DRI
Darden Restaurants
197.41
10.17
5.43%
EAT
Brinker International
194.33
67.74
53.51%
TXRH
Texas Roadhouse
156.70
-7.06
-4.31%
YUM
Yum! Brands
136.69
-11.13
-7.53%
QSR
Restaurant Brands International
69.76
3.68
5.57%
YUMC
Yum China Holdings
40.96
-0.38
-0.91%
Darden Restaurants Corporate Events
Business Operations and StrategyExecutive/Board ChangesShareholder Meetings
Darden Restaurants Shareholders Back Board and Governance Status Quo
Positive
Sep 24, 2026
At its September 23, 2026 online annual meeting, Darden Restaurants’ shareholders elected nine board directors to serve until the next annual meeting and gave substantial advisory backing to the company’s executive compensation framewo...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.