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Raymond (NSE:RYMD) James raised its price target on Darden Restaurants (NYSE:DRI) stock to $230.00 from $215.00 on Thursday, while maintaining an Outperform rating ahead of the company’s fourth-quarter earnings report. The restaurant chain, currently trading at $217.67 with a market capitalization of $25.47 billion, has shown remarkable momentum with a 52.95% return over the past year, according to InvestingPro data.
The firm cited third-party traffic data showing potential upside to consensus comparable sales estimates at both Olive Garden and Longhorn Steakhouse. Raymond James now expects Olive Garden to post 5.0% comparable sales growth versus the consensus estimate of 3.8%, driven by effective value limited-time offers and increasing first-party delivery sales. This aligns with the company’s overall revenue growth of 5% over the last twelve months.
For Longhorn Steakhouse, the firm raised its comparable sales growth estimate to 6.0%, above the consensus expectation of 5.1%. Darden completed the rollout of its delivery service in early February, which appears to be contributing positively to performance.
Raymond James expects management to guide fiscal year 2026 earnings per share in line with its long-term algorithm targeting 10-15% total shareholder return. The firm’s fiscal 2026 estimate of $10.84 per share, representing 11.4% year-over-year growth excluding an extra week, sits modestly above the Street consensus of $10.74.
Darden shares have gained approximately 18% year-to-date, pushing its valuation toward the upper end of its historical range with a calendar year 2026 price-to-earnings ratio of 19.5x and enterprise value to EBITDA in the mid-12x range. The stock currently trades at a P/E ratio of 24.33x and offers a dividend yield of 2.57%. Despite this, Raymond James believes the stock can continue to rise ahead of what it expects will be a strong fourth-quarter release on June 20 and potentially accelerating segment comparable sales in coming months as the company laps easier year-ago comparisons. For deeper insights into Darden’s valuation and 12 additional key investment tips, visit InvestingPro, where you’ll find comprehensive analysis and the exclusive Pro Research Report.
In other recent news, Darden Restaurants has seen multiple analyst firms adjust their stock price targets and maintain positive ratings based on recent performance and projections. KeyBanc has raised its target to $230, citing strong same-store sales growth for Olive Garden and LongHorn brands, alongside effective promotional strategies and delivery services. Guggenheim increased its target to $220, attributing the change to an upward revision in Darden’s fiscal year 2026 earnings per share estimates, which now include a benefit from a 53rd week in the fiscal calendar. KeyBanc also lifted its target to $220, acknowledging better-than-expected restaurant-level margins and an optimistic outlook for the upcoming quarter. UBS has set a target of $225, highlighting Darden’s resilient sales trends and plans to open new locations, despite economic challenges. Stifel increased its target to $215, noting that lower expenses offset softer sales, and praised the progress of the Uber (NYSE:UBER) Direct delivery service at Olive Garden. These developments reflect a consensus among analysts on Darden’s strong market position and potential for continued growth.
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