Darden Restaurants: Resilient Value Strategy and Undemanding Valuation Support Buy Rating and Multiple Expansion Upside

In a report released today, Danilo Gargiulo from Bernstein maintained a Buy rating on Darden Restaurants, with a price target of $230.00.

Danilo Gargiulo has given his Buy rating due to a combination of factors tied to Darden’s resilient operating performance and attractive valuation. He highlights that Darden’s strategy of keeping price increases below inflation has clearly resonated with value-focused consumers, driving same-store sales growth that meaningfully outpaces the broader industry. The continued strength at Olive Garden and LongHorn, supported by higher marketing investments, menu innovation with lighter options, and favorable demand for steak despite high beef costs, underpins his confidence that momentum can be sustained into the second half. He also sees additional long-term growth levers in faster service, expanding delivery channels, and the company’s proactive stance in managing potential GLP‑1-related demand risks.
Moreover, Gargiulo views the trade-off between revenue growth and margins as attractive under a range of macroeconomic scenarios, noting that higher pricing in the back half of the year should be offset by a benign cost environment even if traffic softens. From a valuation perspective, he considers the current multiple of roughly 16x forward earnings to be undemanding relative to Darden’s 10-year average of about 18.5x, suggesting room for multiple expansion as the company delivers stronger margin flow-through and moves past difficult comparisons. This relative discount, combined with the company’s track record as a long-term compounding story, leads him to see the shares as a compelling entry point for long-term investors. Reflecting this view, he reiterates an Outperform (Buy) rating and a $230 price target, implying upside as earnings grow and the valuation normalizes toward historical levels.

In another report released today, Bank of America Securities also reiterated a Buy rating on the stock with a $261.00 price target.