Can Darden (DRI) Serve Up Another Earnings Surprise?

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Darden Restaurants (DRI) reports its fiscal fourth-quarter earnings before the market open June 20 with the consensus calling for earnings of $1.73 per share and revenue of $2.24 billion. DRI stock is up 19.4% year to date.

Technical Analysis

DRI was recently trading at $119.22 down $6.11 from its 12-month high and $27.88 above its 12-month low. InvestorsObserver’s Stock Score Report gives DRI an 87 long-term technical score and a 75 short-term technical score. The stock has recent support above $115 and recent resistance below $125. Of the 22 analysts who cover the stock 14 rate it Strong Buy, 0 rate it Buy, 7 rate it Hold, 0 rate it Sell, and 1 rate it Strong Sell, DRI gets a score of 73 from InvestorsObserver’s Stock Score Report.

Analysts' Thoughts

DRI stock hit a new all-time high in May before hitting a little profit taking in sympathy to weakness in the overall market. The stock has already begun to recover and could climb to a new record high on the back of a better than expected Q4 report. The company has a six-quarter streak of positive earnings surprises and the street is looking for another earnings beat with a whisper number of $1.75 for the quarter. Profits have risen 20.8% annually over the last five years and looking ahead analysts expect to see earnings rise at an annual rate of 12% over the next five years. If Darden is able to deliver on the expected profit growth the stock has a lot of additional upside potential as shares are currently trading at just 18.5 time future earnings. With consumer confidence running extremely high, dine-in restaurants continue to look attractive at this time. Analysts see additional upside in DRI stock with an average price target of $125.74.

About Darden Restaurants Inc.

Darden is one of the largest players in the $185 billion U.S. casual dining industry. Olive Garden (866 units), LongHorn (514), and Cheddar's Scratch Kitchen (161 company-owned and 14 franchise units) are its core brands, while the smaller, faster-growing specialty restaurant group is made up of Yard House (79), The Capital Grille (58), Seasons 52 (44), Bahama Breeze (42), and Eddie V's (21). In November 2015, the company spun off selected real estate and restaurant assets into Four Corners Property Trust.

  • Last Price:
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  • Change:
    $1.28 (1.02%)
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  • Market Capitalization:
    $15.6 B
  • Day's Range:
    $125.96 - $128.41
  • Dividend Yield:
  • 52-week Range:
    $128 - $95.83
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  • Sector:
    Consumer Cyclical
  • Industry:
  • Analyst Average Recommendation:
    Moderate Buy

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