Darden stock holds Buy rating at Stifel ahead of earnings report

Stifel maintained its Buy rating and $215.00 price target on Darden Restaurants (NYSE:DRI) stock ahead of the company’s upcoming fiscal fourth-quarter earnings report, scheduled for June 20. The firm expects Darden to post earnings per share of at least $2.90 for the quarter, slightly below the Street consensus of $2.94. According to InvestingPro data, nine analysts have recently revised their earnings estimates upward for the upcoming period, suggesting growing confidence in the company’s performance.

Olive Garden’s return to value-oriented promotions and benefits from Uber (NYSE:UBER) Direct likely contributed to comparable sales growth at least in line with analysts’ expectations of 4%, according to Stifel. The firm believes LongHorn Steakhouse maintained strong momentum with same-restaurant sales growth of approximately 5.5%, driven by consistent execution and the reintroduction of popular limited-time offers. This operational success has contributed to Darden’s impressive 51.2% stock return over the past year, with the company’s shares currently trading near their 52-week high of $220.79.

Despite ongoing commodity inflation pressures, Stifel notes that Darden’s supply chain strategy and efficient labor management should help mitigate margin challenges. The restaurant operator continues to leverage these operational strengths across its portfolio of brands, maintaining a healthy 21.5% gross profit margin. InvestingPro analysis indicates the company is currently trading above its Fair Value, with a P/E ratio of 24.26x relative to its near-term earnings growth prospects.

For fiscal year 2026, Stifel anticipates Darden will issue guidance reflecting its long-term framework with same-restaurant sales growth assumptions of 2-3%. The firm projects fiscal 2026 earnings per share of $10.55, below the Street consensus of $10.73.

Stifel suggests investors may view initial earnings guidance as conservative given the sales momentum observed in the fiscal fourth quarter. Darden is scheduled to report its quarterly results in the coming weeks.

In other recent news, Darden Restaurants has seen a series of analyst upgrades and price target increases, reflecting positive expectations for its financial performance. Raymond (NSE:RYMD) James raised its price target for Darden to $230, citing strong traffic data and potential upside in comparable sales for Olive Garden and Longhorn Steakhouse. The firm anticipates fiscal year 2026 earnings per share (EPS) to align with its long-term growth targets. KeyBanc also increased its price target to $230, highlighting robust same-store sales momentum and effective promotional strategies. Guggenheim adjusted its price target to $220, noting a valuation multiple expansion due to anticipated EPS growth for fiscal year 2026. Additionally, UBS raised its price target to $225, maintaining a Buy rating and pointing to Darden’s resilient sales trends despite external challenges. The company plans to open 60-65 new locations and expects a fiscal year 2026 EPS benefit from an additional week. These developments suggest a strong outlook for Darden’s upcoming financial results and strategic growth plans.

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