Darden Restaurants’ analyst price target has been trimmed by less than $1 to $221. Analysts cite mixed performance in recent earnings, ongoing inflationary pressures, and continued strength in core brands like Olive Garden as factors shaping their slightly more cautious outlook.
Analyst Commentary
Following Darden Restaurants' most recent earnings, analysts provided a spectrum of updated price targets and assessments. Their commentary reflects a mix of optimism about the company’s long-term trajectory and caution regarding near-term challenges.
Bullish Takeaways
- Bullish analysts highlight Darden’s consistent operational execution. Recent share pullbacks are seen by some as potential buying opportunities.
- Many point to the resilience of Olive Garden and LongHorn brands. These brands continue to outperform in same-store sales and maintain strong market positioning despite broader sector volatility.
- Strategic initiatives such as delivery expansion, effective promotions, and menu innovation are credited with supporting incremental sales drivers and fostering ongoing growth.
- Some bullish analysts have raised their price targets, expressing confidence in Darden’s ability to underprice inflation without sacrificing margin expansion. Their view is supported by modest menu price increases and enhanced productivity.
Bearish Takeaways
- Bearish analysts express caution over the impact of inflation, especially elevated beef costs. They note possible margin compression despite counterbalancing efforts through pricing and cost controls.
- There is concern about the company’s modest Q1 sales miss and the potential for this quarter to represent a short-term peak in performance.
- Pressure on earnings expectations, including recent downward revisions to EPS and price targets, is attributed to rising input costs and uncertain macroeconomic conditions.
- Some analysts are also wary of the higher expectations Darden faces after previously strong share performance relative to the sector. This could make further upside harder to achieve in the near term.
What's in the News
- President Trump is set to sign an order to reduce tariffs on beef and other food imports in an effort to lower grocery prices. This move could impact Darden Restaurants and other major food companies (Bloomberg).
- Darden Restaurants is among the notable companies reporting earnings before tomorrow's market open, with an earnings consensus of $2.01 (Periodicals).
- The company recently announced new earnings guidance for 2026, projecting total sales growth of 7.5% to 8.5% and same-restaurant sales growth of 2.5% to 3.5%.
- Darden completed share repurchases totaling over $183 million between May and August 2025, continuing its ongoing buyback program.
Valuation Changes
- Consensus Analyst Price Target has edged down slightly, from $221.50 to $221.33.
- Discount Rate has fallen marginally, moving from 9.26% to 9.24%.
- Revenue Growth expectations remain essentially unchanged at approximately 5.50%.
- Net Profit Margin outlook is nearly flat, adjusting from 10.04% to 10.04%.
- Future P/E ratio has declined modestly, from 22.41x to 22.38x.
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