Street View: Darden's underlying trends strengthen as headwinds ease
DRI•Darden maintained its annual forecasts after narrowly missing first-quarter estimates, with weakness at Olive Garden weighing on results. Analysts cited improving sales trends and easing headwinds; the median price target from 30 brokerages is $236.
1. Forecasts maintained
Darden Restaurants maintained its annual forecasts on Thursday after narrowly missing first-quarter estimates, hurt by weakness at Olive Garden.
2. Analysts see improving trends
J.P. Morgan said sales trends improved through the quarter and into September, while Jefferies cited improving demand, easing headwinds and Olive Garden's value offerings. TD Cowen said Olive Garden's weakness was largely tied to temporary factors, including the World Cup and cyclospora-related concerns, while LongHorn Steakhouse's traffic-driven growth remained intact. BTIG said Darden continued to take market share through its value offerings.
3. Price targets
The median price target among 30 brokerages covering Darden is $236. J.P. Morgan's target is $225, Jefferies' is $200, TD Cowen's is $215 and BTIG's is $235.
