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Darden Restaurants
(NYSE:DRI)
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Rating:77Outperform
Price Target:
$242.00
▲(20.36% Upside)
Action:Reiterated
Date:06/25/26
DRI’s score is driven primarily by solid, consistent fundamentals and strong cash generation, tempered by elevated leverage on the balance sheet. Technicals add support with a clear uptrend and positive momentum. Earnings call guidance was constructive (sales, comps, and higher EPS outlook), while valuation is fair with a supportive ~2.8% dividend yield but a mid-20s P/E.
Positive Factors
Strong free cash flow generation
DRI's FCF of roughly $1.67B TTM and rising operating cash flow demonstrate durable cash conversion and earnings quality. Consistent cash generation supports reinvestment, dividends, share repurchases and debt servicing, underpinning long-term financial flexibility.
Negative Factors
Elevated financial leverage
High leverage (debt-to-equity near 2.94x) increases sensitivity to operating volatility or a downturn. While returns on equity are strong, elevated debt limits financial flexibility, raises refinancing and interest-risk, and constrains ability to absorb sustained margin pressure.
Read all positive and negative factors
Positive Factors
Negative Factors
Strong free cash flow generation
DRI's FCF of roughly $1.67B TTM and rising operating cash flow demonstrate durable cash conversion and earnings quality. Consistent cash generation supports reinvestment, dividends, share repurchases and debt servicing, underpinning long-term financial flexibility.
Read all positive factors
Darden Restaurants Key Performance Indicators (KPIs)
Any
Revenue by Segment
Breaks down revenue streams from various segments, indicating which parts of the business are thriving and which may need strategic attention.
Breaks down revenue streams from various segments, indicating which parts of the business are thriving and which may need strategic attention.
Data provided by:
The Fly
The FlyDarden Restaurants (DRI) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$23.40B
Dividend Yield3.06%
Average Volume (3M)1.08M
Price to Earnings (P/E)19.5
Beta (1Y)0.46
Revenue Growth9.39%
EPS Growth17.16%
CountryUS
Employees191,105
SectorConsumer Cyclical
Sector Strength84
IndustryRestaurants
Share Statistics
EPS (TTM)10.46
Shares Outstanding114,535,000
10 Day Avg. Volume1,173,183
30 Day Avg. Volume1,076,786
Financial Highlights & Ratios
PEG Ratio1.13
Price to Book (P/B)10.45
Price to Sales (P/S)1.75
P/FCF Ratio20.62
Enterprise Value/Market Cap1.29
Enterprise Value/Revenue2.28
Enterprise Value/Gross Profit3.29
Enterprise Value/Ebitda12.89
Forecast
1Y Price Target
$228.50Price Target Upside13.64% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering20
EPS Forecast (FY)11.3
Revenue Forecast (FY)$13.69B
Darden Restaurants Business Overview & Revenue Model
Company Description
Darden Restaurants, Inc., through its various subsidiaries, focuses on the ownership and operation of full-service dining establishments across both the United States and Canada. As of May 29, 2022, the company's extensive portfolio comprised 1,86...
How the Company Makes Money
Darden makes money primarily by selling food and beverages to guests in its company-operated restaurants. Revenue is generated on a per-transaction basis (dine-in and, where offered, off-premise such as takeout/delivery) and is driven by guest tra...
Darden Restaurants Earnings Call Summary
Earnings Call Date:Jun 25, 2026
(Q4-2026)
| % Change Since: |
Next Earnings Date:Sep 17, 2026
Earnings Call Sentiment Positive
The call presented a largely positive operational and financial picture: strong top-line growth, robust same-restaurant sales outperformance versus industry, notable brand-level momentum (especially LongHorn and Olive Garden), solid earnings and cash returns to shareholders, and continued unit growth and international franchising. Headwinds include elevated commodity (notably beef) inflation that compressed restaurant-level margins for the year, one-time conversion and pre-opening costs, some younger-guest softness, and near-term fuel/utility impacts. Management provided a constructive FY2027 outlook with moderate same-restaurant sales guidance (2.5%–3.5%), continued unit growth, and EPS guidance above FY2026 levels, while signaling confidence in cost management and franchise expansion. Overall, positives (growth, margin recovery in Q4, cash returns, brand momentum, disciplined strategy) outweigh the lowlights (inflation, conversion costs, cohort softness), supporting a favorable outlook.Positive Updates
Strong Q4 and FY2026 Top-Line Performance
Q4 total sales of $3.7 billion, up 13.7% year-over-year; FY2026 total sales increased 9.4% and surpassed $13 billion for the first time in company history.
Negative Updates
Elevated Commodity Inflation, Especially Beef
Beef inflation was ~12% for FY2026, higher than expected; company expects beef inflation to moderate to low single-digits in FY2027 with mid-to-high single-digit pressure in Q1 and slight deflation in Q2. Commodity basket guidance ~3% for FY2027.
Read all updates
Q4-2026 Updates
Positive
Negative
Strong Q4 and FY2026 Top-Line Performance
Q4 total sales of $3.7 billion, up 13.7% year-over-year; FY2026 total sales increased 9.4% and surpassed $13 billion for the first time in company history.
Read all positive updates
Company Guidance
For fiscal 2027 Darden guided total sales of $13.6–13.75 billion, same-restaurant sales growth of 2.5%–3.5% (flat to positive traffic), 75–80 gross restaurant openings plus 11 Bahama Breeze conversions, capital spending of ~ $875 million, total inflation of ~3% (commodities ~3%, labor ~3.5%), EBITDA of $2.26–2.29 billion, diluted net EPS of $11.10–11.35 on roughly 114 million diluted shares, an annual effective tax rate of ~13.5%, and an 8% raise to the quarterly dividend to $1.52 ($6.48 annual); the outlook assumes ~3% pricing, includes ~ $25 million of incremental marketing (≈10 bps) with ~$5–6 million of cost saves, and contemplates roughly $15 million (≈$0.10 EPS) of pre-opening/year-one inefficiencies with EBITDA margin flat to slightly positive.Darden Restaurants Financial Statement Overview
Summary
Income Statement
78
Positive
Balance Sheet
62
Positive
Cash Flow
74
Positive
| Breakdown | May 2026 | May 2025 | May 2024 | May 2023 | May 2022 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 13.21B | 12.08B | 11.39B | 10.49B | 9.63B |
| Gross Profit | 9.17B | 2.64B | 2.43B | 2.11B | 2.00B |
| EBITDA | 2.34B | 1.88B | 1.78B | 1.60B | 1.53B |
| Net Income | 1.21B | 1.05B | 1.03B | 981.90M | 952.80M |
Balance Sheet | |||||
| Total Assets | 12.86B | 12.59B | 11.32B | 10.24B | 10.14B |
| Cash, Cash Equivalents and Short-Term Investments | 219.50M | 240.00M | 194.80M | 367.80M | 420.60M |
| Total Debt | 6.05B | 6.23B | 5.43B | 4.79B | 4.89B |
| Total Liabilities | 10.65B | 10.28B | 9.08B | 8.04B | 7.94B |
| Stockholders Equity | 2.21B | 2.31B | 2.24B | 2.20B | 2.20B |
Cash Flow | |||||
| Free Cash Flow | 1.12B | 1.04B | 983.60M | 951.80M | 857.00M |
| Operating Cash Flow | 1.85B | 1.71B | 1.61B | 1.55B | 1.26B |
| Investing Cash Flow | -711.40M | -1.28B | -1.32B | -568.40M | -389.00M |
| Financing Cash Flow | -1.16B | -385.80M | -483.40M | -1.03B | -1.61B |
Darden Restaurants Technical Analysis
Positive
201.07
Price Trends
201.63
Positive
202.04
Positive
194.02
Positive
Market Momentum
1.51
Positive
47.96
Neutral
12.90
Positive
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 201.07 is below the 20-day moving average (MA) of 206.88, below the 50-day MA of 201.63, and above the 200-day MA of 194.02, indicating a neutral trend. The MACD of 1.51 indicates Positive momentum. The RSI at 47.96 is Neutral, neither overbought nor oversold. The STOCH value of 12.90 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for DRI.
Darden Restaurants Risk Analysis
Darden Restaurants disclosed 34 risk factors in its most recent earnings report. Darden Restaurants reported the most risks in the "Production" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Darden Restaurants Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
77 Outperform | $23.40B | 19.53 | 50.71% | 3.06% | 9.39% | 17.16% | |
77 Outperform | $12.77B | 30.99 | 28.21% | 1.63% | 10.25% | -3.61% | |
72 Outperform | $7.62B | 16.97 | 123.43% | ― | 11.75% | 40.33% | |
71 Outperform | $45.40B | 26.36 | -23.33% | 1.84% | 9.65% | 23.32% | |
68 Neutral | $14.56B | 15.92 | 16.97% | 1.98% | 6.72% | 8.73% | |
64 Neutral | $34.13B | 21.74 | 27.14% | 3.60% | 9.26% | -3.76% | |
61 Neutral | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% |
* Consumer Cyclical Sector Average
DRI
Darden Restaurants
204.32
-5.28
-2.52%
EAT
Brinker International
177.71
4.29
2.47%
TXRH
Texas Roadhouse
194.28
11.35
6.21%
YUM
Yum! Brands
164.73
17.21
11.66%
QSR
Restaurant Brands International
74.79
9.35
14.29%
YUMC
Yum China Holdings
41.70
-4.82
-10.36%
Darden Restaurants Corporate Events
Business Operations and StrategyStock BuybackDividendsFinancial DisclosuresRegulatory Filings and Compliance
Darden Restaurants Modernizes Bylaws to Enhance Shareholder Participation
Positive
Jun 25, 2026
On June 24, 2026, Darden’s board approved immediate amendments to the company’s bylaws, expanding the number of shareholders who can aggregate holdings for director nominations, updating procedures to align with universal proxy rules, ...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.