Shares of Darden Restaurants Inc (NYSE:DRI) tanked in early trading on Friday, after the company reported mixed fiscal fourth-quarter results.
Here are some key analyst takeaways:
- Stephens analyst Jim Salera maintained an Equal-Weight rating, while raising the price target from $210 to $216.
- BTIG analyst Peter Saleh reaffirmed a Buy rating, while lifting the price target from $225 to $235.
- Needham analyst Charles Shi reiterated a Hold rating and price target of $215.
Check out other analyst stock ratings.
Stephens: Darden Restaurants reported total revenue of $3.719 billion, missing Street expectations of $3.730 billion, Salera said in a note. Same-store sales grew 4.6%, topping consensus of 4.1%, while adjusted earnings of $3.66 per share also came in above expectations of $3.63 per share, he added.
Although Olive Garden decelerated sequentially, the results were healthy and included positive traffic, the analyst stated. "LongHorn accelerated again and remains the star of the portfolio," he further wrote.
Darden Restaurants continues to outperform its casual dining peers, "despite a lackluster industry backdrop and inflationary pressures," Salera noted.
BTIG: Darden Restaurants witnessed consistent trends throughout the quarter, Saleh said. There was traffic growth across all income cohorts, "pointing to a slightly cautious, but resilient customer base against recent economic pressures," he wrote.
Olive Garden’s comps of 2.4% missed consensus of 3.2%, expectations. Longhorn, meanwhile, posted comps of 9.5%, delivering the best performance in more than three years. Management guided to fiscal 2027 same-store sales of 2.5%-3.5%, including flat-to-slightly positive traffic and 2.5%-3.0% check growth, he further noted.
Needham: Darden indicated that the consumer backdrop remained steady. Monthly sales came in line on a two-year basis, Shi said. Management expects Olive Garden’s same-store sales to grow at the low end of 2.5%-3.5% range in fiscal 2027, he added.
"We expect no drastic changes in the strategic playbook to build traffic with new efforts focused on lighter portions and protein-forward offerings," the analyst wrote. LongHorn’s estimates could be revised higher "given the brand’s favorable lower cost positioning in the steakhouse category amid demand destruction at the grocery channel," he further stated.
DRI Price Action: Shares of Darden Restaurants had declined by 1.61% to $209.34 at the time of publication on Friday.
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