Stifel lifts Darden Restaurants stock price target to $215

On Friday, Stifel analysts increased the price target for Darden Restaurants (NYSE:DRI) shares to $215 from $205, while keeping a Buy rating on the stock. Currently trading at $199.01 with a market capitalization of $23.31 billion, the restaurant giant maintains a P/E ratio of 21.17. The adjustment follows Darden’s third fiscal quarter earnings report, which met expectations with earnings of $2.80 per share. According to InvestingPro, 10 analysts have recently revised their earnings estimates upward for the upcoming period. This result came despite softer-than-anticipated comparable sales at Olive Garden and LongHorn Steakhouse. Lower general and administrative (G&A) and marketing expenses helped to offset the revenue shortfall from projections.

Darden’s performance arrives amid a backdrop of deteriorating broader consumer sentiment. Nevertheless, the company has not observed any significant changes in consumer dining habits, with current quarter-to-date comparable sales trends indicating a solid 3% consolidated same-restaurant sales (SRS) in the fourth fiscal quarter. The company has demonstrated strong financial resilience, maintaining dividend payments for 31 consecutive years and achieving a 5% revenue growth in the last twelve months. InvestingPro analysis reveals several more key insights about Darden’s financial health and market position. Analysts at Stifel found it promising that the implementation of the Uber (NYSE:UBER) Direct delivery service at Olive Garden is progressing well. They anticipate that the extension of this delivery service to other suitable brands could substantially enhance comparable sales for the coming quarters.

Despite the positive aspects, Stifel analysts have decided to maintain their fourth fiscal quarter earnings per share (EPS) estimate for Darden at $2.88. This decision is based on the belief that the impact of higher inflation in the fourth quarter will balance out the projected increase in SRS. Looking further ahead, the analysts have revised their fiscal year 2026 EPS estimate for Darden upwards to $10.45. This revision takes into account a more conservative view of the consumer environment moving forward. For comprehensive analysis and detailed insights, investors can access Darden’s full Pro Research Report, available exclusively on InvestingPro, along with reports for 1,400+ other top US stocks.

In other recent news, Darden Restaurants reported third-quarter earnings of $2.80 per share, aligning with expectations despite softer sales at Olive Garden and LongHorn Steakhouse. Analysts from Stifel maintained a Buy rating, raising their price target to $215, citing effective cost management and a potential 3% increase in same-restaurant sales for the fourth quarter. BofA Securities also increased their price target to $238, highlighting the strong underlying trends and positive sales growth across Darden’s segments, despite weather-related challenges. BTIG raised their target to $210, noting optimism about Darden’s marketing strategies and the impact of the Uber Direct delivery partnership at Olive Garden.

TD Cowen adjusted their price target to $190, maintaining a Hold rating, and pointed out the premium valuation of Darden’s shares compared to historical values. Jefferies, meanwhile, raised their target to $165 but maintained an Underperform rating, expressing concerns over the company’s valuation and the modest potential of delivery service expansions. The Uber Direct partnership, which has doubled order volumes at Olive Garden, is seen as a key growth driver by multiple analysts. The restaurant chain’s ability to navigate industry challenges and capitalize on delivery and promotional strategies continues to be a focal point for investors.

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