Darden Restaurants (DRI) AI Stock Analysis

• Market Cap: $24.91B
• Dividend Yield: 2.87%
• Average Volume (3M): 1.42M
• Price to Earnings (P/E): 24.0
• Beta (1Y): 0.48
• Revenue Growth: 6.03%
• EPS Growth: 4.08%
• Country: US
• Employees: 191,105
• Sector: Consumer Cyclical
• Sector Strength: 64
• Industry: Restaurants
• EPS (TTM): 2.98
• Shares Outstanding: 117,026,245
• 10 Day Avg. Volume: 1,292,125
• 30 Day Avg. Volume: 1,423,085
• PEG Ratio: 220.03
• Price to Book (P/B): 11.19
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 24.36
• Enterprise Value/Market Cap: 1.27
• Enterprise Value/Revenue: 0.67
• Enterprise Value/Gross Profit: 5.57
• Enterprise Value/Ebitda: 4.30
• 1Y Price Target: $238.05
• Price Target Upside: 13.71% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 21

• Rating: 80 Outperform
• Price Target: $254.00 ▲(21.33%Upside)

Darden Restaurants scores highly due to its strong financial performance and positive earnings call sentiment, which highlight robust growth and strategic expansion. Technical analysis supports a favorable stock trend, while valuation indicates a slightly high price but balanced by a decent dividend yield. Corporate events add to the positive outlook, emphasizing shareholder returns.

Positive Factors

Operational Performance

Management continues to demonstrate strong execution in a challenging environment and is pivoting to a more proactive sales driving approach.

Partnerships and Expansion

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

Strategic Growth

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

Negative Factors

Earnings 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.

Strategic 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., headquartered in Orlando, Florida, is a premier full-service dining company operating multiple restaurant brands. The company owns and manages a diverse portfolio of restaurant chains, including Olive Garden, LongHorn Steakhouse, Cheddar's Scratch Kitchen, Yard House, The Capital Grille, Seasons 52, Bahama Breeze, and Eddie V's. Darden is renowned for offering a wide range of dining experiences, from casual to fine dining, and is committed to delivering exceptional culinary experiences and hospitality across all its brands.

How the Company Makes Money

Darden Restaurants generates revenue primarily through the operation of its restaurant chains. The company's income is driven by sales of food and beverages at its numerous locations, with a significant emphasis on providing quality dining experiences that encourage repeat customer visits. Key revenue streams include in-restaurant dining, takeout, and delivery services. Darden leverages its strong brand portfolio to attract a broad customer base, which contributes to steady foot traffic and sales. Additionally, the company benefits from economies of scale in procurement and efficient supply chain management, enhancing profitability. Strategic marketing initiatives and loyalty programs also play a role in driving revenue growth by increasing brand visibility and customer retention.

Darden Restaurants Financial Statement Overview

Summary

Darden Restaurants demonstrates solid financial performance with strong revenue growth, stable profitability, and efficient cash flow management. The income statement highlights a 6.03% revenue increase and improved net profit margins, while the balance sheet shows a moderate leverage level and robust ROE of 45.39%. The cash flow indicates solid operational efficiency with a strong free cash flow growth.

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	Jun 2025	Jun 2024	Jun 2023	Jun 2022	Jun 2021
Income Statement
Total Revenue	12.08B	11.39B	10.49B	9.63B	7.20B
Gross Profit	8.42B	2.41B	2.08B	2.00B	1.49B
EBITDA	1.70B	1.78B	1.59B	1.54B	993.40M
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	254.50M	194.80M	367.80M	420.60M	1.21B
Total Debt	5.95B	5.43B	5.97B	5.91B	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	1.71B	993.40M	951.80M	857.00M	924.90M
Operating Cash Flow	1.71B	1.62B	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: Neutral
• Last Price: 209.34
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For DRI, the sentiment is Neutral. The current price of 209.34 is below the 20-day moving average (MA) of 217.33, below the 50-day MA of 211.20, and above the 200-day MA of 186.87, indicating a neutral trend. The MACD of 0.19 indicates Positive momentum. The RSI at 39.87 is Neutral, neither overbought nor oversold. The STOCH value of 7.06 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for DRI.

Darden Restaurants Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
DRI	80 Outperform	$24.91B	24.03	46.16%	2.87%	6.03%	4.08%
TXRH	76 Outperform	$12.36B	28.74	33.55%	1.45%	15.09%	31.24%
CAKE	74 Outperform	$3.18B	20.15	46.60%	1.67%	4.42%	48.23%
EAT	73 Outperform	$7.41B	22.78	314.08%	―	19.80%	117.96%
YUM	68 Neutral	$42.35B	30.38	-19.43%	1.90%	10.09%	-11.50%
PZZA	64 Neutral	$1.57B	20.34	-20.16%	3.83%	-2.77%	4.01%
Sector *	63 Neutral	$16.82B	11.32	-7.02%	2.91%	1.72%	-24.85%

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.

The most recent analyst rating on (DRI) stock is a Hold with a $210.00 price target. To see the full list of analyst forecasts on Darden Restaurants stock, see the DRI Stock Forecast page.