Darden Restaurants (DRI) AI Stock Analysis

• Market Cap: $21.93B
• Dividend Yield: 3.03%
• Average Volume (3M): 1.33M
• Price to Earnings (P/E): 20.2
• Beta (1Y): 0.39
• Revenue Growth: 8.30%
• EPS Growth: 7.69%
• Country: US
• Employees: 191,105
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Restaurants
• EPS (TTM): 1.97
• Shares Outstanding: 116,594,900
• 10 Day Avg. Volume: 2,148,143
• 30 Day Avg. Volume: 1,331,088
• PEG Ratio: 5.44
• Price to Book (P/B): 10.37
• Price to Sales (P/S): 1.99
• P/FCF Ratio: 23.16
• Enterprise Value/Market Cap: 1.47
• Enterprise Value/Revenue: 2.61
• Enterprise Value/Gross Profit: 7.70
• Enterprise Value/Ebitda: 16.84
• 1Y Price Target: $227.10
• Price Target Upside: 20.72% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 21

• Rating: 71 Outperform
• Price Target: $213.00 ▲(13.23% Upside)

Darden Restaurants' overall stock score reflects strong financial performance and positive earnings call sentiment, indicating robust growth prospects. However, technical analysis shows current bearish momentum, and valuation metrics suggest the stock is fairly priced. The company's strategic initiatives and expansion plans support a positive long-term outlook.

Positive Factors

Revenue Growth

Darden's strong revenue growth indicates robust market demand and effective strategic initiatives, supporting long-term business expansion.

Expansion Plans

The planned opening of new restaurants demonstrates Darden's commitment to growth and market penetration, enhancing its competitive position.

Cash Flow Performance

Strong cash flow growth underscores Darden's ability to fund operations and strategic initiatives, ensuring financial stability and flexibility.

Negative Factors

High Leverage

Significant leverage could pose financial risks, limiting Darden's ability to invest in growth and weather economic downturns.

Commodity and Labor Costs

Rising commodity and labor costs can pressure margins, potentially impacting profitability if not managed effectively.

Fine Dining Segment Challenges

Challenges in the Fine Dining segment may hinder overall growth, requiring strategic adjustments to improve performance.

Darden Restaurants Business Overview & Revenue Model

Company Description

Darden Restaurants, Inc. is a prominent American multi-brand restaurant operator headquartered in Orlando, Florida. The company operates several well-known dining chains, including Olive Garden, LongHorn Steakhouse, Cheddar's Scratch Kitchen, and The Capital Grille, among others. Darden's portfolio spans casual dining, fine dining, and fast-casual sectors, providing a diverse range of cuisines and dining experiences to its customers. The company focuses on high-quality food and exceptional service, catering to families and dining enthusiasts alike.

How the Company Makes Money

Darden Restaurants generates revenue primarily through the operation of its restaurant brands, which offer a variety of food and beverage options. The company earns money by selling meals and drinks directly to customers in its restaurants. Key revenue streams include dine-in service, takeout, and delivery options. Darden also benefits from its extensive supply chain and economies of scale, which help to manage costs and increase profitability. Additionally, the company engages in promotional partnerships and marketing initiatives that drive customer traffic and enhance brand visibility. Seasonal menu offerings and loyalty programs further contribute to its revenue by encouraging repeat visits and customer retention.

Darden Restaurants Financial Statement Overview

Summary

Darden Restaurants shows strong financial health with consistent revenue growth and solid profitability metrics. The company effectively generates cash, though high leverage poses a potential risk. The strong return on equity highlights its ability to generate returns for shareholders.

Income Statement

Darden Restaurants has demonstrated consistent revenue growth, with a TTM revenue growth rate of 2.38%. The company maintains strong profitability with a gross profit margin of 33.93% and a net profit margin of 8.90% in the TTM period. EBIT and EBITDA margins are also healthy at 11.24% and 15.52%, respectively, indicating efficient operations. However, the slight decline in EBIT margin compared to the previous year suggests potential cost pressures.

Balance Sheet

The balance sheet shows a high debt-to-equity ratio of 2.77, indicating significant leverage, which could pose risks if not managed carefully. However, the company has a strong return on equity of 49.94%, reflecting efficient use of equity to generate profits. The equity ratio stands at 17.45%, suggesting a moderate level of equity financing relative to total assets.

Cash Flow

Darden Restaurants has shown robust cash flow performance with a free cash flow growth rate of 21.31% in the TTM period. The operating cash flow to net income ratio is 0.75, indicating strong cash generation relative to net income. The free cash flow to net income ratio of 0.71 further underscores the company's ability to convert earnings into cash, although there is room for improvement in cash flow efficiency.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	12.36B	12.08B	11.39B	10.49B	9.63B	7.20B
Gross Profit	4.20B	2.64B	2.43B	2.11B	2.00B	1.49B
EBITDA	1.92B	1.88B	1.78B	1.60B	1.53B	992.60M
Net Income	1.10B	1.05B	1.03B	981.90M	952.80M	629.30M
Balance Sheet
Total Assets	12.76B	12.59B	11.32B	10.24B	10.14B	10.66B
Cash, Cash Equivalents and Short-Term Investments	211.00M	240.00M	194.80M	367.80M	420.60M	1.21B
Total Debt	6.16B	6.23B	5.43B	4.79B	5.91B	5.76B
Total Liabilities	10.53B	10.28B	9.08B	8.04B	7.94B	7.84B
Stockholders Equity	2.23B	2.31B	2.24B	2.20B	2.20B	2.81B
Cash Flow
Free Cash Flow	1.26B	1.04B	983.60M	951.80M	857.00M	924.90M
Operating Cash Flow	1.77B	1.71B	1.61B	1.55B	1.26B	1.19B
Investing Cash Flow	-1.29B	-1.28B	-1.32B	-568.40M	-389.00M	-263.70M
Financing Cash Flow	-471.30M	-385.80M	-483.40M	-1.03B	-1.61B	-478.90M

Darden Restaurants Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 188.12
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Positive
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For DRI, the sentiment is Negative. The current price of 188.12 is below the 20-day moving average (MA) of 202.28, below the 50-day MA of 204.22, and below the 200-day MA of 198.53, indicating a bearish trend. The MACD of -5.66 indicates Positive momentum. The RSI at 27.43 is Positive, neither overbought nor oversold. The STOCH value of 13.99 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for DRI.

Darden Restaurants Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
TXRH	74 Outperform	$10.80B	24.79	30.19%	1.63%	14.59%	18.98%
DRI	71 Outperform	$21.93B	20.17	50.41%	3.03%	8.30%	7.69%
CAKE	68 Neutral	$2.73B	16.85	39.63%	1.97%	4.77%	38.24%
EAT	68 Neutral	$5.88B	15.91	103.29%	―	21.95%	146.44%
YUM	66 Neutral	$42.38B	30.16	-18.65%	1.83%	11.30%	-7.82%
PZZA	60 Neutral	$1.54B	20.71	-17.38%	3.91%	-1.46%	8.10%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%

Darden Restaurants Corporate Events

Darden Restaurants Reports Strong Q4 and Dividend Increase

On June 13, 2025, Dan Kiernan, President of Olive Garden, announced his retirement effective August 31, 2025, with John Wilkerson set to succeed him on September 1, 2025. Darden Restaurants reported a strong fiscal fourth quarter and year-end for 2025, with a 10.6% increase in total sales driven by same-restaurant sales growth and acquisitions. The company also declared a 7.1% increase in its quarterly dividend and authorized a new $1 billion share repurchase program, reflecting its robust financial health and commitment to shareholder value.