Darden Restaurants (DRI) AI Stock Analysis

• Market Cap: $22.08B
• Dividend Yield: 3.06%
• Average Volume (3M): 1.65M
• Price to Earnings (P/E): 19.9
• Beta (1Y): 0.42
• Revenue Growth: 8.61%
• EPS Growth: 9.39%
• Country: US
• Employees: 191,105
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Restaurants
• EPS (TTM): 2.08
• Shares Outstanding: 116,313,760
• 10 Day Avg. Volume: 2,220,484
• 30 Day Avg. Volume: 1,645,401
• PEG Ratio: 5.71
• Price to Book (P/B): 10.89
• Price to Sales (P/S): 2.08
• P/FCF Ratio: 24.32
• Enterprise Value/Market Cap: 1.19
• Enterprise Value/Revenue: 2.09
• Enterprise Value/Gross Profit: 4.59
• Enterprise Value/Ebitda: 13.46
• 1Y Price Target: $222.40
• Price Target Upside: 17.51% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 21
• EPS Forecast (FY): 10.58
• Revenue Forecast (FY): $13.14B

• Rating: 76 Outperform
• Price Target: $218.00 ▲(15.19% Upside)

Darden Restaurants' strong financial performance and positive earnings call sentiment are the most significant factors driving the score. The company's strategic expansion and robust cash flow generation support its growth prospects. However, technical indicators suggest caution due to potential overbought conditions, and the high debt-to-equity ratio remains a risk factor.

Positive Factors

Revenue Growth

Darden's revenue growth exceeding expectations indicates strong market demand and effective operational strategies, supporting long-term expansion.

Expansion and New Openings

Strategic expansion through new restaurant openings enhances market presence and revenue potential, driving sustainable growth.

Cash Generation

Strong cash flow generation supports reinvestment opportunities and shareholder returns, enhancing financial stability and growth prospects.

Negative Factors

High Debt Levels

Significant leverage may limit financial flexibility and increase vulnerability to interest rate hikes, impacting long-term financial health.

Commodity Cost Pressures

Persistent commodity cost pressures, especially in beef, could erode profit margins, affecting overall profitability and competitiveness.

Labor Cost Challenges

Rising labor costs may pressure margins and require operational adjustments, potentially impacting long-term profitability and cost management.

Darden Restaurants Business Overview & Revenue Model

Company Description

Darden Restaurants, Inc., through its subsidiaries, owns and operates full-service restaurants in the United States and Canada. As of May 29, 2022, it owned and operated 1,867 restaurants, which included 884 under the Olive Garden brand, 546 under the LongHorn Steakhouse brand name, 172 under the Cheddar's Scratch Kitchen brand, 85 under the Yard House brand name, 62 under The Capital Grille brand, 45 under the Seasons 52 brand name, 42 under the Bahama Breeze brand, 28 under the Eddie V's Prime Seafood brand name, and 3 under the Capital Burger brand; and franchised 60 restaurants comprising 35 under the Olive Garden brand, 18 under the LongHorn Steakhouse brand name, 4 under the Cheddar's Scratch Kitchen brand, 2 under The Capital Grille brand name, and 1 under the Bahama Breeze brand.Darden Restaurants, Inc. was founded in 1968 and is based in Orlando, Florida.

How the Company Makes Money

Darden Restaurants generates revenue primarily through the operation of its restaurants, where it earns income from food and beverage sales. Each of its brands has a distinct market positioning that caters to different customer demographics, allowing for a broad customer base. Additionally, the company benefits from economies of scale in purchasing and supply chain management, which helps to control costs and maximize profit margins. Darden also engages in strategic partnerships with food suppliers and distributors, enhancing its ability to provide quality ingredients while managing expenses. Seasonal promotions, loyalty programs, and effective marketing strategies further drive customer traffic and sales, contributing significantly to the company's overall earnings.

Darden Restaurants Financial Statement Overview

Summary

Darden Restaurants shows strong revenue growth and profitability with a robust gross profit margin of 45.49%. However, the high debt-to-equity ratio of 3.08 poses a risk, despite strong cash flow generation supporting financial flexibility.

Income Statement

Darden Restaurants has demonstrated strong revenue growth with a TTM increase of 1.72% and consistent profitability, evidenced by a solid net profit margin of 8.92% and an EBIT margin of 8.72%. The gross profit margin is robust at 45.49%, indicating effective cost management. However, there is a slight decline in EBIT margin compared to the previous annual report, suggesting potential cost pressures.

Balance Sheet

The company exhibits a high debt-to-equity ratio of 3.08, indicating significant leverage, which could pose risks in a rising interest rate environment. However, the return on equity is strong at 50.89%, reflecting efficient use of equity capital. The equity ratio stands at 16.07%, suggesting a moderate reliance on equity financing.

Cash Flow

Darden Restaurants shows a healthy free cash flow growth rate of 22.44% TTM, indicating strong cash generation capabilities. The operating cash flow to net income ratio is 1.51, highlighting efficient cash conversion. The free cash flow to net income ratio of 0.91 suggests that a significant portion of earnings is being converted into free cash flow, supporting potential reinvestment or shareholder returns.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	12.08B	11.39B	10.49B	9.63B	7.20B
Gross Profit	2.64B	2.43B	2.11B	2.00B	1.49B
EBITDA	1.88B	1.78B	1.60B	1.53B	992.60M
Net Income	1.05B	1.03B	981.90M	952.80M	629.30M
Balance Sheet
Total Assets	12.59B	11.32B	10.24B	10.14B	10.66B
Cash, Cash Equivalents and Short-Term Investments	240.00M	194.80M	367.80M	420.60M	1.21B
Total Debt	6.23B	5.43B	4.79B	4.89B	5.76B
Total Liabilities	10.28B	9.08B	8.04B	7.94B	7.84B
Stockholders Equity	2.31B	2.24B	2.20B	2.20B	2.81B
Cash Flow
Free Cash Flow	1.04B	983.60M	951.80M	857.00M	924.90M
Operating Cash Flow	1.71B	1.61B	1.55B	1.26B	1.19B
Investing Cash Flow	-1.28B	-1.32B	-568.40M	-389.00M	-263.70M
Financing Cash Flow	-385.80M	-483.40M	-1.03B	-1.61B	-478.90M

Darden Restaurants Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 189.26
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For DRI, the sentiment is Positive. The current price of 189.26 is above the 20-day moving average (MA) of 181.36, above the 50-day MA of 180.47, and below the 200-day MA of 196.60, indicating a neutral trend. The MACD of 3.06 indicates Negative momentum. The RSI at 61.54 is Neutral, neither overbought nor oversold. The STOCH value of 64.71 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for DRI.

Darden Restaurants Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
YUMC	78 Outperform	$17.50B	20.07	15.44%	1.98%	3.29%	6.72%
DRI	76 Outperform	$22.08B	19.90	54.10%	3.06%	8.61%	9.39%
QSR	75 Outperform	$31.86B	24.97	28.08%	3.53%	16.82%	-29.91%
TXRH	72 Outperform	$11.63B	26.85	31.55%	1.57%	14.40%	12.45%
EAT	70 Neutral	$6.64B	15.66	249.07%	―	23.18%	138.17%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
YUM	59 Neutral	$42.69B	29.94	―	1.83%	11.60%	-4.33%

Darden Restaurants Corporate Events

Darden Restaurants Approves Special Equity Grant for CEO

On September 17, 2025, Darden Restaurants‘ Board approved a special equity grant for CEO Ricardo Cardenas, consisting of performance stock units with a target value of $17 million, set to vest in 2030 based on the company’s shareholder return relative to the S&P 500. Additionally, during the annual shareholder meeting held on the same day, nine directors were elected, executive compensation was approved, KPMG was ratified as the auditor, and a proposal on greenhouse gas emission targets was rejected.