Darden Restaurants (DRI) AI Stock Analysis

• Market Cap: $24.59B
• Dividend Yield: 2.71%
• Average Volume (3M): 933.51K
• Price to Earnings (P/E): 23.7
• Beta (1Y): 0.45
• Revenue Growth: 6.03%
• EPS Growth: 4.08%
• Country: US
• Employees: 191,105
• Sector: Consumer Cyclical
• Sector Strength: 83
• Industry: Restaurants
• EPS (TTM): 2.98
• Shares Outstanding: 117,033,830
• 10 Day Avg. Volume: 784,142
• 30 Day Avg. Volume: 933,515
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 1.28
• Enterprise Value/Revenue: 2.61
• Enterprise Value/Gross Profit: 11.95
• Enterprise Value/Ebitda: 16.78
• 1Y Price Target: $238.19
• Price Target Upside: 13.35% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 21

• Rating: 79 Outperform
• Price Target: $237.00 ▲(12.78% Upside)

Darden Restaurants receives a strong overall score driven by robust financial performance and positive earnings call insights. While technical indicators and valuation suggest caution, the company's strategic initiatives and growth outlook support a favorable investment perspective.

Positive Factors

Partnerships and Expansion

There is room for continued share gains as Olive Garden grows its delivery business with Uber Direct.

Sales and Growth

Olive Garden comps accelerated significantly against a challenged consumer spending environment, indicating strong momentum.

Strategic Direction

The strategic pivot toward sales growth is seen as a key positive that builds on recent momentum.

Negative Factors

Financial Guidance

DRI introduced below-consensus FY26 EPS guidance due to macro uncertainty and investments.

Investor Concerns

Investors may have some pause as new targets emphasize investments to drive topline.

Market Risks

There is a bit of risk in targeting higher sales and location growth at a time when things are going quite well, and that might give some pause.

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 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 demonstrates a solid financial position with consistent revenue growth, stable profitability, and effective cash flow management. The company effectively uses equity to generate high returns, maintaining a competitive edge in the restaurant industry.

Income Statement

Darden Restaurants has shown strong revenue growth with a 6.03% increase in the TTM compared to the previous year, driven by consistent EBIT and EBITDA margins of 11.28% and 15.18% respectively. The net profit margin improved slightly to 8.69%. The company maintains healthy profitability and growth, positioning itself well within the competitive restaurant industry.

Balance Sheet

The company's debt-to-equity ratio increased slightly to 2.57, indicating a moderate leverage level typical for the industry. The return on equity (ROE) is robust at 45.39%, reflecting efficient use of shareholder funds. The equity ratio remains stable at 18.36%, showing a healthy balance between debt and equity funding.

Cash Flow

Darden Restaurants exhibited a strong free cash flow growth of 6.82% in the TTM period. The operating cash flow to net income ratio stands at 1.63, indicating solid operational efficiency. The free cash flow to net income ratio is 1.01, supporting the company's ability to generate cash beyond net income, crucial for reinvestment and debt servicing.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	12.08B	12.08B	11.39B	10.49B	9.63B	7.20B
Gross Profit	2.64B	2.64B	2.43B	2.11B	2.00B	1.49B
EBITDA	1.88B	1.88B	1.78B	1.60B	1.53B	992.60M
Net Income	1.05B	1.05B	1.03B	981.90M	952.80M	629.30M
Balance Sheet
Total Assets	12.59B	12.59B	11.32B	10.24B	10.14B	10.66B
Cash, Cash Equivalents and Short-Term Investments	240.00M	254.50M	194.80M	367.80M	420.60M	1.21B
Total Debt	5.95B	5.95B	5.43B	4.79B	5.91B	5.76B
Total Liabilities	10.28B	10.28B	9.08B	8.04B	7.94B	7.84B
Stockholders Equity	2.31B	2.31B	2.24B	2.20B	2.20B	2.81B
Cash Flow
Free Cash Flow	1.06B	1.71B	983.60M	951.80M	857.00M	924.90M
Operating Cash Flow	1.71B	1.71B	1.61B	1.55B	1.26B	1.19B
Investing Cash Flow	-1.28B	-1.28B	-1.32B	-568.40M	-389.00M	-263.70M
Financing Cash Flow	-385.80M	-385.80M	-483.40M	-1.03B	-1.61B	-478.90M

Darden Restaurants Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 210.14
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

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 210.14 is above the 20-day moving average (MA) of 206.63, above the 50-day MA of 208.16, and above the 200-day MA of 195.95, indicating a bullish trend. The MACD of 0.53 indicates Negative momentum. The RSI at 58.43 is Neutral, neither overbought nor oversold. The STOCH value of 80.42 is Negative, 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
DRI	79 Outperform	$24.59B	23.70	46.16%	2.71%	6.03%	4.08%
TXRH	74 Outperform	$11.22B	25.75	32.28%	1.57%	14.59%	18.98%
CAKE	68 Neutral	$3.02B	18.66	41.01%	1.78%	4.77%	38.24%
EAT	66 Neutral	$7.04B	19.04	186.74%	―	21.95%	146.44%
YUM	64 Neutral	$40.13B	28.56	-19.43%	1.94%	11.30%	-7.82%
Sector *	61 Neutral	$17.92B	12.81	-3.11%	2.97%	1.30%	-14.28%
PZZA	60 Neutral	$1.58B	21.26	-20.16%	3.81%	-1.46%	8.10%

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.