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On Monday, Truist Securities expressed a positive outlook for Darden Restaurants (NYSE:DRI), with analyst Jake Bartlett increasing the price target on the company’s shares to $212 from the previous target of $200, while keeping a Buy rating on the stock. Currently trading at $185.99, the stock appears overvalued according to InvestingPro analysis, with analyst targets ranging from $145 to $230. The adjustment comes ahead of the company’s fiscal third-quarter 2025 earnings report, which is expected to be released before the market opens on March 20, 2025.
Bartlett anticipates that the recent acceleration in same-store sales (SSS) will more than compensate for a potential shortfall in the third-quarter results. Despite a year-to-date performance that Bartlett described as ’flat,’ Darden’s stock has still managed to outperform the broader restaurant sector, which has seen a decline of 9.5%, and the S&P 500’s drop of 4.1%. The analyst predicts that Darden’s shares will continue to outdo the market, even if overall restaurant demand begins to wane.
The insight from Truist Card Data highlighted that Olive Garden, one of Darden’s key brands, has seen a notable increase in same-store sales in January and February. This trend runs counter to the wider industry’s performance. Bartlett suggests that the national marketing campaign for delivery services, which began on February 24, along with the anticipated ’Buy One, Take One’ promotion set to start on March 24, will further drive Darden’s outperformance in the sector.
While Bartlett has slightly reduced earnings estimates for Darden Restaurants, the raised price target reflects a shift in valuation to the year 2026. The company maintains strong fundamentals with a 3.01% dividend yield and has maintained dividend payments for 31 consecutive years. This adjustment underscores Truist Securities’ confidence in the company’s continued growth and ability to navigate the challenges within the restaurant industry. For deeper insights into Darden’s financial health and growth prospects, including 10 additional ProTips and comprehensive valuation metrics, explore the full research report available on InvestingPro.
In other recent news, Darden Restaurants has been the subject of several analyst reviews and company announcements. Stifel analysts maintained a Buy rating with a $205 price target, noting mixed same-restaurant sales expectations for Olive Garden and LongHorn Steakhouse. Despite concerns about consumer confidence, strategic initiatives like Olive Garden’s partnership with Uber (NYSE:UBER) Direct for delivery are in focus. KeyBanc Capital Markets also maintained an Overweight rating, adjusting earnings expectations ahead of fiscal third quarter 2025 results. The firm revised its same-store sales growth estimate to 1.5% and adjusted its EPS forecast for fiscal year 2025 to $9.44, slightly below consensus estimates.
In a separate development, Darden Restaurants announced the retirement of board member Nana Mensah, effective immediately, with no immediate plans for a successor. Meanwhile, KeyBanc analysts expressed a bullish outlook, citing Darden’s undervaluation in the casual-dining sector and maintaining a $200 price target. The analysis highlighted the strength of Darden’s brands in delivering high-value experiences. These updates reflect ongoing strategic evaluations and adjustments within Darden Restaurants as it navigates industry challenges and opportunities.
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