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Investing.com - KeyBanc has lowered its price target on Darden Restaurants (NYSE:DRI) to $240.00 from $245.00 while maintaining an Overweight rating on the stock. The company, currently trading at $211.85 with a P/E ratio of 23.64, appears fairly valued according to InvestingPro analysis.
The adjustment comes as KeyBanc anticipates rising cost pressures, particularly in beef prices, despite expectations that the restaurant chain maintained strong top-line momentum during the first quarter of fiscal year 2026. InvestingPro data shows the company maintains good financial health with a score of 2.79, supported by revenue growth of 6.03% over the last twelve months.
KeyBanc has also trimmed its earnings per share estimates for Darden to $10.80 for fiscal year 2026 and $11.43 for fiscal year 2027, reflecting these increased commodity costs and consumer uncertainty outside the full-service restaurant industry.
Despite these adjustments, KeyBanc still expects Darden to slightly beat earnings expectations for the first quarter of fiscal year 2026, with their full-year earnings estimate remaining above the top end of Darden’s guidance range.
The new price target of $240 represents approximately 22 times KeyBanc’s calendar year 2026 earnings per share estimate for the company, which owns restaurant chains including Olive Garden and LongHorn Steakhouse. The company has maintained dividend payments for 31 consecutive years, currently offering a 2.83% yield, with 14.5% dividend growth in the last twelve months.
In other recent news, Darden Restaurants reported fiscal fourth-quarter earnings that slightly exceeded analyst expectations. The company posted adjusted earnings per share of $2.98, surpassing the consensus estimate of $2.97, and reported revenue of $3.272 billion, which also exceeded expectations of $3.265 billion. Despite these strong results, the company issued a conservative outlook for fiscal year 2026. Truist Securities maintains a Buy rating with a $252.00 price target, anticipating solid first-quarter results that could lead to increased guidance for fiscal year 2026. Evercore ISI lowered its price target to $245.00 from $250.00, citing higher food cost inflation as a reason for adjusting its fiscal year 2026 earnings per share forecast. BMO Capital reiterated its Market Perform rating, expecting Darden to meet market expectations in its upcoming fiscal first-quarter results. Melius Research initiated coverage with a Hold rating and a $240.00 price target, highlighting Darden’s consistent performance in full-service dining. These developments reflect a mix of cautious optimism and strategic adjustments among analysts regarding Darden’s financial prospects.
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