Update shared on20 Sep 2025
Fair value Decreased 3.61%Darden Restaurants’ consensus price target was revised down from $233.29 to $224.86 as analysts responded to a modest earnings miss, lower guidance, and margin pressures, despite ongoing strength in same-store sales and positive long-term drivers.
Analyst Commentary
- Recent price target changes reflect a modest earnings miss and guidance below elevated expectations, prompting some downward revisions, though several analysts remain positive on the long-term outlook.
- Bullish analysts highlight strong same-store sales trends and market share gains, particularly at Olive Garden and LongHorn, along with incremental sales drivers like growing delivery, menu innovation, and promotional activity.
- Margin pressures from beef and food cost inflation are a concern, but are partially offset by menu price adjustments, strategic cost management, labor productivity, and smaller portion initiatives driving modest margin expansion.
- The company’s strategy of underpricing inflation, reinvesting in affordability, and focusing on sales growth—sometimes at the expense of near-term margins—is seen as supportive of higher multiples and long-term growth.
- Share performance has been resilient versus the sector, but some bearish analysts note near-term headwinds, elevated investor expectations, and increased macro uncertainty as reasons for cautious or hold stances.
What's in the News
- Darden Restaurants is scheduled to report earnings before the market opens, with a consensus estimate of $2.01 per share (Periodicals).
- The company has completed a share repurchase of 3,183,541 shares (2.68%) for $550.76 million under a buyback announced March 2024, and separately repurchased 66,393 shares (0.06%) for $135 million from a new tranche announced June 2025 (Key Developments).
- Darden provided 2026 earnings guidance, projecting total sales growth of 7.5%–8.5% (including a 53rd week), same-restaurant sales growth of 2.5%–3.5%, and diluted EPS from continuing operations of $10.64–$10.84 (Key Developments).
- Bowyer Research has opposed a shareholder proposal from the Humane Society seeking disclosure of measurable greenhouse gas reduction targets, urging investors to vote against it (Key Developments).
- Darden Restaurants has been added to the Russell 1000 Defensive Index, Russell 1000 Value-Defensive Index, and Russell 1000 Growth-Defensive Index (Key Developments).
Valuation Changes
Summary of Valuation Changes for Darden Restaurants
- The Consensus Analyst Price Target has fallen slightly from $233.29 to $224.86.
- The Future P/E for Darden Restaurants has fallen from 24.54x to 22.97x.
- The Consensus Revenue Growth forecasts for Darden Restaurants has fallen slightly from 5.7% per annum to 5.5% per annum.
Disclaimer
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