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Investing.com - Stephens raised its price target on Darden Restaurants (NYSE:DRI) to $212 from $200 on Monday, while maintaining an Equal Weight rating on the restaurant operator’s stock. The stock, currently trading at $225.78 with a market capitalization of $26.42 billion, is approaching its 52-week high of $228.27, with InvestingPro data indicating overbought conditions.
The price target increase follows Darden’s quarterly results that exceeded consensus expectations across all major metrics, including same-store sales, margin, and adjusted earnings per share. Olive Garden and LongHorn Steakhouse delivered strong same-store sales performance, though the Fine Dining segment showed a slower-than-anticipated recovery. The company’s impressive performance is reflected in its 52.35% return over the past year and 6.03% revenue growth.
During the quarter, Darden closed 22 underperforming locations, including 15 Bahama Breeze restaurants, indicating a strategic shift toward portfolio quality and improved returns. The company’s fiscal year 2026 comparable sales guidance aligned with Wall Street expectations, while its earnings per share forecast came in below consensus estimates. For deeper insights into Darden’s strategic positioning and comprehensive financial analysis, check out the detailed Pro Research Report available on InvestingPro.
Stephens noted that Darden has "decent visibility" into the first half of fiscal 2026 but faces tougher comparisons in the second half amid continued macroeconomic uncertainty. The firm considers the stock’s current valuation to be "fairly priced."
The updated $212 price target represents an enterprise value to EBITDA multiple of approximately 12 times Stephens’ next-twelve-months EBITDA forecast, compared to Darden’s 10-year average trading multiple of 10.6 times.
In other recent news, Darden Restaurants reported strong financial results for the fourth quarter of fiscal year 2025, surpassing analysts’ expectations with earnings per share (EPS) of $2.98 and revenue of $3.3 billion. This marked a 12.5% increase in EPS and a 10.6% rise in revenue year-over-year. Raymond (NSE:RYMD) James raised its price target for Darden to $240, citing stronger-than-expected sales growth at Olive Garden and LongHorn Steakhouse. Similarly, KeyBanc increased its price target to $245, highlighting Darden’s better-than-anticipated earnings and strong marketing responses. Evercore ISI maintained an Outperform rating, projecting Olive Garden and LongHorn to achieve over 4% same-store sales growth by fiscal year 2026. BTIG also reiterated a Buy rating with a $235 price target, noting Darden’s healthy sales momentum and controlled inflation. These developments reflect a positive outlook for Darden, with plans to open 60-65 new restaurants in fiscal 2026 and projected sales growth of 7-8%.
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