Darden Restaurants (NYSE:DRI), owner of several chain restaurant brands including Olive Garden, slipped as much as just under 1% in premarket action overnight, but recovered at several points as the night went on. Upward momentum has continued so far into this morning's session. The company released a winning earnings report and positive guidance for the 2022 fiscal year. Financial analysts, meanwhile, are out in full force supporting Darden with recommendations, and have been for years now.
Victory All Around for Darden Restaurant Earnings
The earnings report featured several wins for Darden Restaurants, itself a winner among restaurant stocks. Earnings per share figures came in at an adjusted $2.03, which handily beat Refinitiv's expectations of $1.79. Revenue also posted a win, as the company brought in $2.28 billion for the quarter against Refinitiv's $2.19 billion projected.
What's more, the company posted massive increases in same-restaurant sales. Same-restaurant sales were up 90.4% against the numbers posted this time last year, when pandemic restrictions were finally starting to come off in some places. Comparisons to quarters from two years ago, meanwhile, were shockingly apt; same-restaurant sales fell a mere 0.5% against the same quarter in 2019.
Darden Restaurants topped off the earnings announcement with guidance for fiscal 2022, looking for sales between $9.2 billion and $9.5 billion. That's up between 5% and 8% from 2019 levels, though it assumes that all its locations will be allowed to operate without restrictions. The company also looks for same-restaurant sales growth to continue, up another 25% to 29% against the 2021 fiscal year. Diluted net earnings per share are projected between $7 and $7.50 per share. Darden's projections are approximately similar to what analysts were already projecting, looking for the company to bring in $7.21 per share for the fiscal year, with revenue of $9.22 billion.
Darden Restaurants also declared a cash dividend to be paid August 2, 2021 for shareholders of record as of July 9. The dividend is valued at $1.10 per share, which represents a 25% increase from the third quarter of fiscal year 2021.
What Are Financial Analysts Saying About DRI Stock?
The news out of financial analysts, as based on our latest research, looks sound for DRI stock to come. Darden Restaurants currently carries a consensus rating of “buy”, and it's held that rating firmly for the last two years.
A year ago, during the worst of the pandemic, Darden Restaurants had 21 “buy” ratings and 10 “hold” ratings to its credit. Six months ago, the ratios were unchanged, holding at 21 “buy” and 10 “hold”. Today, analyst perception is a little more bullish than it was, with 22 “buy” ratings and eight “hold”, demonstrating increased buying interest among analysts and declining hold interest.
Consensus Darden Restaurants price targets have a fairly broad range, but most seem focused around a common level. The current average price is $146.03, with a high of $175 and a low of $75. That $75 low, however, goes all the way back to April 2020, when it was issued by Wolfe Research after initiating coverage on the stock. With Darden stock seen trading over $139 in today's session, upside potential still remains.
Recent developments have been very kind to Darden Restaurants stock; two days ago, Royal Bank of Canada upped its price target on Darden from $158 to $162. Wedbush offered a similar boost just last week, going from $146 to $150, though it maintains a “neutral” rating on the stock. A week before Wedbush, Truist hiked its own price target from $158 to $170. In general, all but a handful of analysts have increased price targets on Darden Restaurants since the beginning of this year.
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