Newegg commerce: Galkin family buys $5.8M in NEGG stock
Friday - UBS analyst Dennis Geiger has increased the price target for Darden Restaurants (NYSE:DRI) stock to $225 from the previous $210 while keeping a Buy rating on the shares. Currently trading near its 52-week high of $203.47, the stock has delivered an impressive 26.24% return over the past year. According to InvestingPro data, analysts’ price targets range from $145 to $235, with Geiger’s new target approaching the upper end. Geiger’s optimism is rooted in the company’s third fiscal quarter performance, which showed resilient sales trends despite challenges such as adverse weather and calendar shifts.
Darden Restaurants, the parent company of Olive Garden and LongHorn Steakhouse, has demonstrated a sales performance that outperformed the industry by more than 100 basis points in January and February. With annual revenue of $11.76 billion and a solid gross profit margin of 21.55%, the company maintains a "GOOD" financial health rating on InvestingPro. The company’s strategic plans are expected to support continued momentum into the fiscal year 2026. The third fiscal quarter’s same-store sales (sss) of 2.6% saw growth across all consumer income groups except for those earning less than $50,000 annually.
The positive trends have continued into the fourth fiscal quarter to date, with Darden aiming for same-store sales growth of over 3%. The company has maintained dividend payments for 31 consecutive years, currently offering a 2.81% yield. The initial guidance for fiscal year 2026 includes plans to open 60-65 new locations, total capital expenditures ranging from $675 million to $725 million, and an anticipated earnings per share benefit of approximately $0.20 from an extra week in the fiscal year.
Geiger believes that Darden’s stock has further upside potential, even after today’s price increase. While InvestingPro analysis suggests the stock is slightly overvalued at current levels, with a P/E ratio of 22.18x and PEG ratio of 5.68x, factors contributing to its potential include continued sales momentum despite a challenging macroeconomic environment, a long-term total shareholder return algorithm of 10-15%, and the defensive nature of the casual dining sector. Investors seeking deeper insights can access comprehensive Pro Research Reports covering 1,400+ top stocks, including Darden, through InvestingPro.
Additionally, the partnership with Uber (NYSE:UBER) is seen as a possible growth opportunity over time, with the potential for expanding Darden’s first-party brand (currently being tested at 10 Cheddar’s locations) and possibly extending to third-party platforms in the future.
In other recent news, Darden Restaurants reported earnings of $2.80 per share for its third fiscal quarter, meeting expectations despite softer-than-anticipated sales at Olive Garden and LongHorn Steakhouse. Analysts from Stifel and BofA Securities have raised their price targets for Darden, with Stifel increasing it to $215 and BofA to $238, both maintaining a Buy rating. Meanwhile, BTIG also raised its target to $210, citing strong sales acceleration in March. TD Cowen lifted its target to $190 but kept a Hold rating, noting Darden’s premium valuation compared to historical levels.
The company’s partnership with Uber Direct is seen as a key driver of sales growth, particularly at Olive Garden, where delivery accounts for 2.5% of sales. Analysts have noted that this initiative could enhance future comparable sales, with BofA highlighting that order volumes have doubled over the quarter. Darden’s marketing strategies, including promotional offers, are also contributing to its market share growth. Despite inflationary pressures, analysts remain optimistic about Darden’s ability to navigate industry challenges and maintain strong performance.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.