Darden Restaurants’ average analyst price target has declined modestly, falling by several dollars as analysts cite slightly pressured margins and earnings amid higher input costs. However, they continue to highlight the company’s strong market positioning and resilient sales momentum.
Analyst Commentary
Recent research coverage on Darden Restaurants reflects a mix of cautious and optimistic themes, as experts weigh macroeconomic pressures against the company’s ongoing strengths. Price target revisions have generally trended downward; however, the majority of analysts maintain positive ratings and see resilience in Darden’s execution.
Bullish Takeaways
- Bullish analysts highlight Darden’s strong positioning in the casual dining sector, with Olive Garden and LongHorn continuing to lead in same-store sales growth.
- Despite modest earnings misses, several believe the company’s operational execution remains on track and suggest the recent share price weakness creates attractive entry points for investors.
- Darden’s focus on affordability, menu innovation, and underpricing inflation are seen as strategic advantages supporting customer traffic and margin management over time.
- Ongoing initiatives in delivery, effective promotions, and smaller portion menu tests are cited as incremental sales drivers that may contribute to future growth.
Bearish Takeaways
- Bearish analysts cite higher beef and input costs as ongoing headwinds, leading to modest reductions in earnings estimates and margin pressure.
- Some remain cautious due to recent quarterly results that came in below elevated market expectations, fueling concerns about near-term performance momentum.
- There are concerns that Darden’s shares had previously held up better than the sector, meaning valuation may need to re-rate downwards to adjust for relative outperformance.
- Macro uncertainty and changes to consumer spending are seen as potential risks that could limit upside, even in the face of strong brand positioning.
What's in the News
- Darden Restaurants is scheduled to report earnings tomorrow, with consensus expectations at $2.01 per share (Periodical).
- The company has updated its share buyback activity, repurchasing 66,393 shares for $135 million during June to August 2025 under a program announced in June 2025 (Key Development).
- Darden issued 2026 financial guidance, projecting total sales growth of 7.5% to 8.5%, same-restaurant sales growth of 2.5% to 3.5%, and diluted net earnings per share from continuing operations of $10.64 to $10.84 (Key Development).
- Bowyer Research filed a statement urging Darden shareholders to vote against a proposal for the company to set measurable greenhouse gas emissions reduction targets (Key Development).
Valuation Changes
- Fair Value Estimate has decreased modestly to $222.10, down from $224.86.
- Discount Rate has edged down slightly to 9.34%, compared to the prior 9.37%.
- Revenue Growth Forecast has marginally declined to 5.49%, compared to the previous 5.53%.
- Net Profit Margin estimate is nearly unchanged, declining slightly to 10.04% from 10.05%.
- Future P/E Ratio projection has decreased modestly to 22.52x, compared to 22.97x previously.
Have other thoughts on Darden Restaurants?
Create your own narrative on this stock, and estimate its Fair Value using our Valuator tool.
Create NarrativeDisclaimer
AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.