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Investing.com - Darden Restaurants (NYSE:DRI) shares gained Thursday after the company reported fiscal fourth-quarter earnings that slightly exceeded analyst expectations, despite issuing a conservative outlook for fiscal year 2026. The restaurant chain, currently valued at $25.12 billion, has seen its stock surge 52.35% over the past year and is trading near its 52-week high of $228.27. According to InvestingPro analysis, the stock is currently showing signs of being overbought.
The restaurant operator posted adjusted earnings per share of $2.98, marginally above the consensus estimate of $2.97, while revenue reached $3.272 billion, also surpassing expectations of $3.265 billion. Restaurant margins came in at 21.6%, outperforming the 21.3% analysts had projected. Trading at a P/E ratio of 24.1x, InvestingPro data indicates the stock is trading at a premium relative to its near-term earnings growth potential.
Darden’s blended same-store sales growth of 4.6% beat the consensus forecast of 3.6%, with Olive Garden posting 6.9% growth compared to expectations of 4.6%, and LongHorn Steakhouse delivering 6.7% growth versus the anticipated 5.1%.
For fiscal year 2026, Darden provided initial guidance projecting total sales growth of 7-8%, including approximately 2% from the 53rd week, which falls below the consensus estimate of 8.9%. The company expects same-store sales growth of approximately 2-3.5% excluding Chuy’s, and adjusted earnings per share between $10.50 and $10.70, slightly below the consensus of $10.77.
UBS maintained its Buy rating on Darden with a $245.00 price target, noting that key focus areas for investors include recent sales trends, first-quarter-to-date performance, earnings flow-through, industry outlook, and updates on the Olive Garden Uber (NYSE:UBER) Eats partnership. The company has maintained dividend payments for 31 consecutive years, with a current dividend yield of 2.66%. For deeper insights into Darden’s valuation and 12 additional ProTips, check out the comprehensive research available on InvestingPro.
In other recent news, Darden Restaurants reported quarterly results that exceeded expectations, with strong same-store sales and earnings per share aligning with consensus estimates. However, the company issued fiscal year 2026 earnings guidance below analyst expectations. Truist Securities maintained a buy rating with a $252 price target, highlighting sales momentum and growth catalysts such as Olive Garden’s anticipated delivery sales boost. Stephens raised its price target to $212, noting the strategic closure of underperforming locations and alignment of sales guidance with Wall Street expectations. BTIG also reiterated a buy rating with a $235 target, emphasizing healthy sales growth and controlled inflation. Raymond (NSE:RYMD) James increased its price target to $240, citing strong comparable sales growth at Olive Garden and LongHorn Steakhouse. Evercore ISI maintained an Outperform rating with a $250 target, projecting robust growth for Olive Garden and LongHorn despite a challenging industry landscape.
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