Zacks Investment Research cut shares of Darden Restaurants (NYSE:DRI) from a buy rating to a hold rating in a report released on Monday.
According to Zacks, “Darden’s shares outpaced its industry so far this year. Most of its brands have witnessed growth over the past few quarters, given various sales initiatives like simplifying kitchen systems, operational excellence to enhance guest experience, menu innovation along with technology-driven moves. The acquisition of Cheddar's has added an undisputed casual dining value leader to Darden's portfolio of differentiated brands, which is expected to further drive comps. Initiatives to attract guests at Olive Garden, LongHorn and other units also bode well. Further, Darden’s efforts to check costs are commendable. Backed by these efforts, Darden’s first-quarter fiscal 2018 earnings topped the Zacks Consensus Estimate for the 12th consecutive quarter. Yet, rising labor costs and a non-franchised business model are likely to dampen the company’s profits, while a soft industry backdrop might pressurize comps.”
A number of other research analysts have also recently issued reports on DRI. ValuEngine upgraded Darden Restaurants from a hold rating to a buy rating in a research note on Friday, September 1st. Robert W. Baird reiterated a hold rating and set a $94.00 price objective on shares of Darden Restaurants in a research note on Tuesday, September 19th. Oppenheimer reiterated a buy rating and set a $100.00 price objective on shares of Darden Restaurants in a research note on Wednesday, September 20th. Maxim Group restated a hold rating and issued a $90.00 price target on shares of Darden Restaurants in a research note on Thursday, September 21st. Finally, Royal Bank of Canada restated a sector perform rating and issued a $90.00 price target (down previously from $96.00) on shares of Darden Restaurants in a research note on Friday, September 22nd. One equities research analyst has rated the stock with a sell rating, seventeen have issued a hold rating and eight have assigned a buy rating to the company’s stock. The stock presently has an average rating of Hold and an average price target of $88.91.
Darden Restaurants (NYSE:DRI) last announced its quarterly earnings data on Tuesday, September 26th. The restaurant operator reported $0.99 earnings per share (EPS) for the quarter, meeting the Zacks’ consensus estimate of $0.99. The business had revenue of $1.94 billion during the quarter, compared to analysts’ expectations of $1.93 billion. Darden Restaurants had a return on equity of 26.06% and a net margin of 6.60%. The firm’s quarterly revenue was up 12.9% compared to the same quarter last year. During the same quarter in the previous year, the business earned $0.88 earnings per share. equities research analysts forecast that Darden Restaurants will post 4.44 EPS for the current fiscal year.
The company also recently disclosed a quarterly dividend, which will be paid on Thursday, February 1st. Investors of record on Wednesday, January 10th will be issued a $0.63 dividend. This represents a $2.52 annualized dividend and a dividend yield of 2.78%. The ex-dividend date is Tuesday, January 9th. Darden Restaurants’s payout ratio is currently 65.12%.
Several institutional investors and hedge funds have recently modified their holdings of DRI. HS Management Partners LLC bought a new stake in shares of Darden Restaurants in the third quarter worth $157,044,000. Janus Henderson Group PLC grew its holdings in shares of Darden Restaurants by 113.6% in the third quarter. Janus Henderson Group PLC now owns 1,576,026 shares of the restaurant operator’s stock worth $124,158,000 after acquiring an additional 838,341 shares during the period. APG Asset Management N.V. grew its holdings in shares of Darden Restaurants by 34.4% in the third quarter. APG Asset Management N.V. now owns 2,361,712 shares of the restaurant operator’s stock worth $186,056,000 after acquiring an additional 604,364 shares during the period. Robeco Institutional Asset Management B.V. grew its holdings in shares of Darden Restaurants by 66.8% in the second quarter. Robeco Institutional Asset Management B.V. now owns 1,275,399 shares of the restaurant operator’s stock worth $115,348,000 after acquiring an additional 510,969 shares during the period. Finally, Allianz Asset Management GmbH grew its holdings in shares of Darden Restaurants by 79.8% in the third quarter. Allianz Asset Management GmbH now owns 722,952 shares of the restaurant operator’s stock worth $56,954,000 after acquiring an additional 320,902 shares during the period. 91.45% of the stock is owned by institutional investors.
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About Darden Restaurants
Darden Restaurants, Inc is a full-service restaurant company. The Company owned and operated 1,536 restaurants through its subsidiaries in the United States and Canada, as of May 29, 2016. The Company’s segments include Olive Garden, LongHorn Steakhouse, Fine Dining (which includes The Capital Grille, and Eddie V’s Prime Seafood and Wildfish Seafood Grille (Eddie V’s)) and Other Business (which includes Yard House, Seasons 52, Bahama Breeze, consumer-packaged goods and franchise revenues).
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