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Investing.com - Melius Research initiated coverage on Darden Restaurants (NYSE:DRI) with a Hold rating and a price target of $240.00 on Monday. The company, currently valued at $24.5 billion, has demonstrated strong performance with a 51.7% return over the past year. According to InvestingPro data, 16 analysts have recently revised their earnings upward for the upcoming period.
The research firm described Darden as "the model of consistency in fullservice dining," noting the company balances steady growth with disciplined capital allocation and operational excellence.
Melius highlighted Darden’s leading brands, Olive Garden and LongHorn Steakhouse, which continue to drive traffic through value-focused menus and efficient operations, supported by a vertically integrated supply chain.
The firm also pointed to Darden’s mergers and acquisitions strategy as a growth driver, specifically mentioning Chuy’s as "the next long-term opportunity."
Despite acknowledging Darden’s "steady and proven" business model, Melius believes the stock’s current price "fairly reflects this durable profile."
In other recent news, Darden Restaurants reported fiscal fourth-quarter earnings that slightly surpassed analyst expectations. The company posted adjusted earnings per share of $2.98, just above the consensus estimate of $2.97, and revenue of $3.272 billion, exceeding the forecasted $3.265 billion. Darden’s same-store sales growth was also notable, with Olive Garden and LongHorn Steakhouse outperforming expectations. Despite these positive results, Darden issued a conservative outlook for fiscal year 2026, projecting sales growth of 7-8% and adjusted earnings per share between $10.50 and $10.70, which is below the consensus of $10.77.
Analyst firms have responded to these developments with varied recommendations. UBS maintained its Buy rating with a $245 price target, emphasizing the importance of recent sales trends and partnerships. Truist Securities also reiterated its Buy rating, setting a $252 price target, and highlighted potential growth catalysts like delivery services. Meanwhile, Stephens raised its price target to $212, citing strategic shifts and a focus on portfolio quality. BTIG, maintaining a Buy rating with a $235 price target, acknowledged the company’s strong sales momentum and controlled inflation. Raymond (NSE:RYMD) James increased its price target to $240, praising Darden’s strong comparable sales and effective strategies.
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