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Investing.com - BTIG maintained its Buy rating and $235.00 price target on Darden Restaurants (NYSE:DRI) stock following what it described as "a very compelling quarter" from the restaurant group. The stock, currently trading near its 52-week high of $228.27, has delivered an impressive 52.35% return over the past year. According to InvestingPro analysis, the stock appears to be fairly valued based on its proprietary Fair Value model.
The restaurant company, which owns Olive Garden and LongHorn Steakhouse, reported mid-single-digit same-store sales growth with positive traffic at its two flagship brands, according to BTIG’s analysis released Monday.
Darden demonstrated "a very healthy sales gap to the industry," with same-store sales momentum continuing into June, BTIG noted in its research report. The firm also highlighted that unit growth is accelerating for the restaurant operator.
While inflation appears "modestly higher," BTIG indicated it remains under control, creating what the firm called "a constructive outlook for the year ahead" for the restaurant chain.
BTIG maintained its $235 price target on Darden stock, noting that "management is in the driver’s seat" regarding how much of the current success to let flow through to earnings versus reinvesting in the business. The firm acknowledged that further stock upside would likely come from earnings beats, as the company’s multiple approaches its three-year peak.
In other recent news, Darden Restaurants reported impressive financial results for the fourth quarter of fiscal year 2025, surpassing analysts’ expectations. The company achieved an earnings per share (EPS) of $2.98, exceeding the forecast of $2.94, and reported revenue of $3.3 billion, which was above the anticipated $3.26 billion. KeyBanc raised its price target for Darden to $245, citing better-than-expected earnings and same-store sales trends. Additionally, Raymond (NSE:RYMD) James increased its price target to $240, highlighting strong comparable sales growth for Olive Garden and LongHorn Steakhouse. Evercore ISI maintained an Outperform rating, predicting over 4% same-store sales growth for Olive Garden and LongHorn Steakhouse by fiscal year 2026. Darden’s strategic focus on affordability and labor investments is expected to drive mid-single-digit sales growth long-term, despite a slight reduction in earnings per share estimates due to reinvestments. The company plans to open 60-65 new restaurants in fiscal 2026, continuing its emphasis on revenue growth and market share expansion.
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