Darden Restaurants, Inc. (DRI) fell short of analysts’ expectations in its first-quarter earnings report. The company posted adjusted earnings per share of $1.75, missing the consensus estimate of $1.83, while quarterly sales of $2.76 billion also came in below the projected $2.80 billion. Despite the miss, analysts remain optimistic about Darden’s future, citing the potential of its newly announced partnership with Uber for delivery services.
KeyBanc Capital Markets analyst Eric Gonzalez reiterated an Overweight rating on Darden stock, raising the price target to $194 from $170. Gonzalez sees Darden’s partnership with Uber as a key driver of growth and believes it will lead to increased sales. He also raised his FY25 EPS estimate to $9.48, citing a modest increase in blended same-store sales growth due to Darden’s focus on price point advertising at Olive Garden.
BMO Capital Markets analyst Andrew Strelzik maintained a Market Perform rating on Darden, while increasing the price target to $175 from $165. While Strelzik is positive about the delivery partnership, he cautions that sales growth may lag behind competitors due to potential overlap with Darden’s existing off-premise business and its absence from the third-party marketplace. He expects a modest boost to Olive Garden’s comparable sales in the second half of 2025 and a low-single-digit increase in FY2026.
Wedbush analyst Nick Setyan reiterated an Outperform rating on Darden, increasing the price forecast to $200 from $170. Setyan believes Darden will continue to gain market share, even in a challenging consumer landscape, and is confident in the company’s ability to achieve its long-term annual return targets. He highlights the Uber delivery partnership, starting with a pilot program at 5-6 Olive Garden locations, expanding to 100 locations by the second fiscal quarter, and eventually launching at all Olive Garden locations with curbside to-go by the end of FY25. The partnership is set up as a first-party delivery model, with no plans to advertise on UberEats.
Piper Sandler analyst Brian Mullan reiterated a Neutral rating on Darden, while increasing the price target to $177 from $159. Mullan believes the Uber partnership, starting with Olive Garden, Darden’s largest brand, could lead to an unexpected boost in adjusted EPS, particularly in the following year.
Truist Securities analyst Jake Bartlett maintained a Buy rating on Darden, increasing the price forecast to $195 from $185. Bartlett is optimistic about the widespread improvement in same-store sales (SSS) across Darden’s portfolio since July. He believes this, coupled with more proactive marketing efforts and easier year-over-year comparisons in the second half of FY25, will bolster Darden’s premium valuation.
DRI shares were trading lower by 1.41% to $169.85 at last check on Friday.
