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On Monday, Guggenheim maintained a positive outlook on Darden Restaurants (NYSE:DRI) shares, as the firm’s analyst, Greg Francfort, increased the price target from $205.00 to $220.00. The firm continues to endorse a Buy rating for the company. According to InvestingPro data, 12 analysts have recently revised their earnings estimates upward, with the stock currently trading near its 52-week high of $203.47. The adjustment in the price target comes following a revision of Darden’s fiscal year 2026 earnings per share (EPS) estimates, which were raised to $10.80 from $10.70.
The revised EPS estimate takes into account an additional 20 cents attributed to a 53rd week in the fiscal calendar, counterbalanced by roughly 10 cents due to an anticipated higher tax rate. The analyst’s decision to elevate the price target is based on a valuation multiple expansion to 20 times the projected calendar year 2026 earnings, up from 19 times, reflecting the rarity of restaurant brands reporting significant positive comparable sales and the anticipation of further upward revisions to Darden’s 2026 EPS consensus.
Guggenheim’s analysis suggests that Darden Restaurants stands out as one of the premier operators within the restaurant industry, with strong sales momentum. The firm’s valuation multiple for Darden is approaching a premium compared to the S&P 500 index, despite traditionally trading at a modest discount.
The positive sentiment from Guggenheim comes at a time when the restaurant sector is under scrutiny for its ability to maintain growth and navigate market challenges. Darden’s positioning and performance have evidently instilled confidence in the firm, prompting a bullish stance on the stock’s future prospects. For deeper insights into Darden’s valuation and growth potential, investors can access comprehensive analyst coverage and over 30 additional key metrics through the detailed Pro Research Report available on InvestingPro.
In other recent news, Darden Restaurants has reported earnings that align closely with expectations for the third fiscal quarter, with an earnings per share (EPS) of $2.80. Despite a slight shortfall in same-store sales (SSS) growth due to weather-related issues, the company managed to maintain strong restaurant-level margins. Analysts have responded positively to these developments, with KeyBanc raising its price target for Darden to $220 and maintaining an Overweight rating. UBS also increased its target to $225, citing Darden’s resilient sales trends and strategic growth plans, while maintaining a Buy rating.
Stifel has lifted its price target to $215, noting Darden’s ability to offset revenue shortfalls with lower general and administrative expenses. BofA Securities has set a new price target of $238, highlighting the company’s strong underlying trends and successful promotional strategies. Analysts have noted that Darden’s partnership with Uber (NYSE:UBER) Direct is progressing well, potentially boosting future sales. The company’s plans to open new locations and its anticipated benefit from an extra fiscal week are expected to support continued growth into fiscal year 2026.
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