Darden Restaurants, Inc. (DRI), the parent company of well-known dining chains like Olive Garden and Red Lobster, reported slightly disappointing financial results for the first quarter on Thursday. The company’s adjusted earnings per share came in at $1.75, falling short of the analyst consensus estimate of $1.83. Quarterly sales also missed expectations, reaching $2.76 billion compared to the anticipated $2.80 billion.
Despite the miss, Darden CEO Rick Cardenas expressed confidence in the company’s future, stating, “While we fell short of our expectations for the first quarter, I firmly believe in the strength of our business.”
In positive news, Darden’s board of directors approved a quarterly cash dividend of $1.40 per share for its common stock. This dividend will be paid to shareholders on November 1st to those holding shares as of the close of business on October 10th.
This news, coupled with a series of price target adjustments from analysts following the earnings announcement, propelled Darden’s shares up by 8.3%, closing the day at $172.27.
Analysts reacted to the earnings report with mixed sentiments and adjusted their price targets accordingly:
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TD Cowen:
Analyst Andrew Charles maintained a Hold rating on Darden but raised the price target from $150 to $165.*
Bernstein:
Analyst Danilo Gargiulo downgraded the stock from Outperform to Market Perform and lowered the price target from $190 to $180.*
Stephens & Co.:
Analyst Jim Salera maintained an Equal-Weight rating on Darden but raised the price target from $159 to $164.*
Wedbush:
Analyst Nick Setyan maintained an Outperform rating on the stock and raised the price target from $170 to $200.*
Evercore ISI Group:
Analyst David Palmer upgraded Darden Restaurants from In-Line to Outperform and raised the price target from $165 to $205.The contrasting opinions from these analysts suggest that Darden’s future performance is uncertain, with some seeing potential for growth while others remain cautious. Investors considering buying DRI stock should carefully evaluate these diverse perspectives before making any investment decisions.
