Oklo stock tumbles as Financial Times scrutinizes valuation
Investing.com - Goldman Sachs upgraded Darden Restaurants (NYSE:DRI) from Neutral to Buy and set a price target of $225.00, implying 20% upside potential. The stock, currently trading at $188.19, has demonstrated strong momentum with a 17.8% return over the past year. According to InvestingPro data, analyst targets for DRI range from $160 to $259, with a consensus recommendation of 2.0 (Buy).
The upgrade is based on several factors, including an improved value proposition in casual dining that is driving share gains within away-from-home dining. According to Goldman Sachs, casual dining has shown mid-single-digit same-store sales growth in the current quarter to date, compared to flat-to-low-single-digit growth in quick service and fast casual segments. This growth is reflected in Darden’s robust financial performance, with revenue growing 8.3% and maintaining a healthy gross profit margin of 21.8%. InvestingPro analysis reveals the company has maintained dividend payments for 31 consecutive years, showcasing its financial stability.
Goldman Sachs noted that Darden’s Olive Garden and LongHorn brands are gaining market share within casual dining due to their compelling value and scale advantages. The firm also highlighted Darden’s lower exposure to lower-income consumers, who are facing more intense financial pressure.
The restaurant operator has revised its long-term new restaurant growth targets upward to 3%-4%, compared to its previous target of 2%-3%, which Goldman Sachs views as leveraging scale to accelerate top-line growth.
Goldman Sachs also cited Darden’s proven track record and ongoing commitment to delivering double-digit shareholder returns, and identified the company as a key beneficiary of accelerated middle-income quintile pre-savings discretionary cash flow growth expected in 2026.
In other recent news, Darden Restaurants has caught the attention of several analysts following its first-quarter results. UBS has maintained its Buy rating on Darden, adjusting the price target to $230 due to margin pressures despite strong sales momentum and raised fiscal year 2026 sales guidance. TD Cowen also revisited its outlook, lowering its price target to $200 while keeping a Hold rating, citing the end of favorable year-over-year comparisons at Olive Garden. Truist Securities joined the conversation by reducing its price target to $240 after Darden’s first-quarter fiscal 2026 results fell short of same-store sales and earnings per share expectations. Nevertheless, Truist continues to hold a Buy rating, indicating potential upside for the stock. UBS’s discussions with Darden’s leadership highlighted a positive outlook amid industry challenges. These developments underscore the varied perspectives on Darden’s financial performance and future prospects.
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