Darden Restaurants Inc. (DRI) Upgraded to “Buy” at Zacks Investment Research
Zacks Investment Research upgraded shares of Darden Restaurants Inc. (NYSE:DRI) from a hold rating to a buy rating in a research note published on Thursday. The brokerage currently has $69.00 target price on the restaurant operator’s stock.
According to Zacks, “Darden posted mixed first-quarter fiscal 2017 results wherein though the bottom line beat the Zacks Consensus Estimate, the top line lagged the same. Notably, this quarter marked the eighth consecutive earnings beat for the company. The company also raised its guidance for fiscal 2017 earnings and witnessed a rise in sales across all its segments in the first quarter. Going forward, sales initiatives like simplifying kitchen systems, improving in-restaurant execution to enhance guest experience, menu innovation and technology-driven moves should boost the top line. Moreover, the company’s Olive Garden Brand Renaissance plan – aimed to turn around its business – has started reaping benefits. Also, Darden’s efforts to check costs are commendable. However, rising labor costs and a non-franchised business model might dampen the company’s profits, while a soft consumer spending environment could keep comps under pressure.”
Several other brokerages have also commented on DRI. RBC Capital Markets restated a sector perform rating and set a $70.00 target price on shares of Darden Restaurants in a research report on Friday, September 30th. Jefferies Group restated a hold rating and set a $64.00 target price (down from $66.00) on shares of Darden Restaurants in a research report on Saturday, July 2nd. Piper Jaffray Cos. restated an overweight rating and set a $76.00 target price on shares of Darden Restaurants in a research report on Thursday, August 25th. Bank of America Corp. restated a sell rating on shares of Darden Restaurants in a research report on Wednesday. Finally, Wells Fargo & Co. restated a market perform rating and set a $68.00 target price on shares of Darden Restaurants in a research report on Wednesday, September 28th. Three equities research analysts have rated the stock with a sell rating, eleven have assigned a hold rating and twelve have assigned a buy rating to the company. Darden Restaurants currently has an average rating of Hold and a consensus price target of $69.89.
Shares of Darden Restaurants (NYSE:DRI) traded up 0.54% during midday trading on Thursday, hitting $61.28. 570,747 shares of the company were exchanged. Darden Restaurants has a 52-week low of $53.38 and a 52-week high of $68.68. The company has a 50-day moving average price of $61.92 and a 200-day moving average price of $63.81. The stock has a market capitalization of $7.65 billion, a price-to-earnings ratio of 19.79 and a beta of 0.41.
Darden Restaurants (NYSE:DRI) last posted its quarterly earnings data on Tuesday, October 4th. The restaurant operator reported $0.88 earnings per share for the quarter, beating analysts’ consensus estimates of $0.82 by $0.06. Darden Restaurants had a net margin of 5.73% and a return on equity of 24.97%. The firm had revenue of $1.71 billion for the quarter. During the same quarter last year, the business earned $0.68 earnings per share. The business’s quarterly revenue was up 1.6% on a year-over-year basis. On average, analysts forecast that Darden Restaurants will post $3.92 EPS for the current year.
The company also recently disclosed a quarterly dividend, which will be paid on Tuesday, November 1st. Investors of record on Monday, October 10th will be paid a dividend of $0.56 per share. The ex-dividend date of this dividend is Wednesday, October 5th. This represents a $2.24 annualized dividend and a dividend yield of 3.68%. Darden Restaurants’s dividend payout ratio (DPR) is presently 72.03%.
Hedge funds and other institutional investors have recently bought and sold shares of the company. BB&T Securities LLC bought a new stake in Darden Restaurants during the first quarter valued at $2,002,000. Aviva PLC increased its stake in Darden Restaurants by 0.7% in the first quarter. Aviva PLC now owns 138,386 shares of the restaurant operator’s stock valued at $9,175,000 after buying an additional 1,025 shares in the last quarter. Huntington Asset Advisors Inc. bought a new stake in Darden Restaurants during the first quarter valued at $484,000. M&T Bank Corp increased its stake in Darden Restaurants by 6.3% in the first quarter. M&T Bank Corp now owns 236,846 shares of the restaurant operator’s stock valued at $15,703,000 after buying an additional 14,105 shares in the last quarter. Finally, Menta Capital LLC bought a new stake in Darden Restaurants during the first quarter valued at $537,000. Hedge funds and other institutional investors own 94.57% of the company’s stock.
About Darden Restaurants
Darden Restaurants, Inc is a full-service restaurant company. The Company owned and operated 1,536 restaurants through its subsidiaries in the United States and Canada, as of May 29, 2016. The Company’s segments include Olive Garden, LongHorn Steakhouse, Fine Dining (which includes The Capital Grille, and Eddie V’s Prime Seafood and Wildfish Seafood Grille (Eddie V’s)) and Other Business (which includes Yard House, Seasons 52, Bahama Breeze, consumer-packaged goods and franchise revenues).
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