Zacks Investment Research Upgrades Darden Restaurants (DRI) to Buy

Zacks Investment Research upgraded shares of Darden Restaurants (NYSE:DRI) from a hold rating to a buy rating in a research note released on Monday morning. The brokerage currently has $111.00 price target on the restaurant operator’s stock.

According to Zacks, “Darden posted solid second-quarter fiscal 2018 results with the bottom and the top line surpassing the Zacks Consensus Estimate. In fact, the reported quarter marked the 13th successive earnings beat for the company. Meanwhile, Darden’s shares also outpaced its industry in the past one year. Current-quarter and year estimates have also moved northward over the past two months. Going ahead, various sales initiatives and technology-driven moves are expected to boost the top line. Additionally, efforts to attract guests at Olive Garden, LongHorn and other units along with the cost saving measures are encouraging. However, a soft consumer spending environment might keep comps under pressure while rising labor costs and a non-franchised business model may dampen the company’s profits.”

DRI has been the subject of several other research reports. Royal Bank of Canada cut their price objective on Darden Restaurants from $96.00 to $90.00 and set a sector perform rating for the company in a report on Wednesday, September 27th. Oppenheimer restated a buy rating and issued a $100.00 price objective on shares of Darden Restaurants in a report on Wednesday, September 20th. SunTrust Banks restated a hold rating on shares of Darden Restaurants in a report on Thursday, December 21st. BMO Capital Markets set a $101.00 price objective on Darden Restaurants and gave the company a hold rating in a report on Tuesday, December 19th. Finally, Jefferies Group restated a hold rating and issued a $82.00 price objective (down previously from $90.00) on shares of Darden Restaurants in a report on Wednesday, September 27th. One equities research analyst has rated the stock with a sell rating, sixteen have issued a hold rating and ten have issued a buy rating to the stock. The stock presently has an average rating of Hold and a consensus price target of $95.32.

Shares of Darden Restaurants (DRI) traded up $0.42 during trading on Monday, hitting $98.02. The stock had a trading volume of 1,076,331 shares, compared to its average volume of 1,840,000. The company has a debt-to-equity ratio of 0.47, a quick ratio of 0.20 and a current ratio of 0.34. The firm has a market capitalization of $12,120.00, a price-to-earnings ratio of 24.69, a price-to-earnings-growth ratio of 2.11 and a beta of 0.20. Darden Restaurants has a twelve month low of $71.43 and a twelve month high of $100.11.

The business also recently announced a quarterly dividend, which will be paid on Thursday, February 1st. Stockholders of record on Wednesday, January 10th will be issued a dividend of $0.63 per share. This represents a $2.52 annualized dividend and a dividend yield of 2.57%. The ex-dividend date is Tuesday, January 9th. Darden Restaurants’s dividend payout ratio is 63.48%.

In other news, CFO Ricardo Cardenas sold 10,783 shares of the company’s stock in a transaction on Wednesday, January 10th. The stock was sold at an average price of $97.17, for a total transaction of $1,047,784.11. Following the completion of the sale, the chief financial officer now directly owns 20,046 shares of the company’s stock, valued at $1,947,869.82. The sale was disclosed in a document filed with the SEC, which is available at the SEC website. Also, SVP Douglas J. Milanes sold 4,300 shares of the company’s stock in a transaction on Wednesday, January 10th. The shares were sold at an average price of $97.05, for a total value of $417,315.00. Following the sale, the senior vice president now directly owns 7,513 shares of the company’s stock, valued at $729,136.65. The disclosure for this sale can be found here. Over the last ninety days, insiders have sold 74,866 shares of company stock valued at $7,252,094. 0.63% of the stock is currently owned by company insiders.

Several hedge funds and other institutional investors have recently made changes to their positions in the company. Bruderman Asset Management LLC lifted its holdings in shares of Darden Restaurants by 0.4% during the second quarter. Bruderman Asset Management LLC now owns 2,532 shares of the restaurant operator’s stock valued at $229,000 after purchasing an additional 10 shares during the last quarter. D.A. Davidson & CO. lifted its stake in Darden Restaurants by 1.7% in the 2nd quarter. D.A. Davidson & CO. now owns 1,271 shares of the restaurant operator’s stock worth $114,000 after acquiring an additional 21 shares in the last quarter. Commonwealth of Pennsylvania Public School Empls Retrmt SYS lifted its stake in Darden Restaurants by 0.3% in the 2nd quarter. Commonwealth of Pennsylvania Public School Empls Retrmt SYS now owns 9,238 shares of the restaurant operator’s stock worth $835,000 after acquiring an additional 28 shares in the last quarter. Argent Capital Management LLC lifted its stake in Darden Restaurants by 2.0% in the 2nd quarter. Argent Capital Management LLC now owns 5,125 shares of the restaurant operator’s stock worth $464,000 after acquiring an additional 100 shares in the last quarter. Finally, Oppenheimer Asset Management Inc. lifted its stake in Darden Restaurants by 1.8% in the 2nd quarter. Oppenheimer Asset Management Inc. now owns 6,345 shares of the restaurant operator’s stock worth $573,000 after acquiring an additional 114 shares in the last quarter. 91.45% of the stock is owned by institutional investors and hedge funds.

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Darden Restaurants Company Profile

Darden Restaurants, Inc is a full-service restaurant company. The Company owned and operated 1,536 restaurants through its subsidiaries in the United States and Canada, as of May 29, 2016. The Company’s segments include Olive Garden, LongHorn Steakhouse, Fine Dining (which includes The Capital Grille, and Eddie V’s Prime Seafood and Wildfish Seafood Grille (Eddie V’s)) and Other Business (which includes Yard House, Seasons 52, Bahama Breeze, consumer-packaged goods and franchise revenues).

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