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Darden Restaurants, Inc. (DRI) operates full service restaurants in the United States and Canada. It operates restaurants under the Red Lobster, Olive Garden, LongHorn Steakhouse, The Capital Grille, Bahama Breeze, and Seasons 52 brand names. As of February 23, 2012, it owned and operated approximately 1,900 restaurants.

It is scheduled to report its results on June 22, 2012, before the market opens.

Recent EPS Actuals vs. Estimates

The company has met or beaten analysts' estimates in the last four quarters. In the last quarter it reported $1.25 EPS, beating analyst estimates of $1.24.

The consensus EPS is $1.16 based on 29 analysts' estimates, up from $1.00 a year ago. Revenue estimates are $2.11B, up from $1.99B a year ago. The median target price by analysts for the stock is $57.50.

Average recommendation: Overweight

Source: Marketwatch

Analyst Upgrades and Downgrades

  • On May 30, 2012, Miller Tabak reiterated Buy rating for the company.
  • On March 26, 2012, Barclays reiterated Overweight rating for the company.
  • On February 21, 2012, Barclays Capital reiterated Overweight rating for the company.

Key Metrics

  • Market Cap: 6.34B
  • 52-week trading range: 40.69 - 55.84
  • Trailing P/E: 14.76
  • Forward P/E: 12.08
  • Price/Sales: 0.80
  • Price/Book: 3.57
  • PEG Ratio: 1.12
  • Total Debt: 2.18B
  • Annual dividend yield: 3.50%
  • Return on Equity: 25.02%
  • Return on Assets: 8.01%

Latest Developments

  • On May 7, 2012, Darden Restaurants, Inc. today announced that Jim Lawrence will succeed Barry Moullet as Senior Vice President and Chief Supply Chain Officer effective May 28 as the Company begins its new fiscal year.
  • On March 23, 2012, Darden Restaurants, Inc. announced Board of Directors declared a quarterly dividend of $0.43 per share. The dividend is payable on May 1, 2012 to shareholders of record at the close of business on April 10, 2012.
  • On February 23, 2012, Darden Restaurants, Inc. announced that for third quarter of 2012, it expects earnings per share (EPS) in the range of $1.23 to $1.25. For fiscal 2012, the Company reaffirmed earnings per share guidance and expects EPS growth of 4% and 7%.
  • On December 16, 2011, Darden Restaurants, Inc. announced that it expects total sales growth of between 6.0% and 7.0% in fiscal 2012. The Company reaffirmed diluted net earnings per share growth from continuing operations in fiscal 2012 will be in the range of 4% to 7%.

Competitors

Darden Restaurants, Inc. operates in Restaurants industry. The company could be compared to Buffalo Wild Wings Inc. (BWLD), The Cheesecake Factory Incorporated (CAKE), P.F. Chang's China Bistro, Inc. (PFCB), and Ruby Tuesday, Inc. (RT). Below is the table comparison of the most important ratios between these companies and the industry.

Below is the chart comparison with the stock price changes as a percentage for the selected companies and S&P 500 index for the last one year period.

(click to enlarge)DRI Chart

DRI data by YCharts

Competitors' Latest Development

  • On June 6, 2012, Ruby Tuesday, Inc. announced that Sandy Beall, its Founder, Chairman of the Board, Chief Executive Office (CEO), and President, has announced his intention to step down from management and the Board.
  • On May 10, 2012, Law Office of Brodsky & Smith, LLC announced that it is investigating potential claims against the Board of Directors of P.F. Chang's China Bistro, Inc relating to the proposed acquisition by Centerbridge Partners, L.P.
  • On May 8, 2012, Ruby Tuesday, Inc. announced that it had priced a private offering to eligible purchasers of $250 million of 7 5/8% Senior Notes due 2020 (the Notes) at an offering price of 98.536% of the principal amount thereof.
  • On May 8, 2012, The Cheesecake Factory, Inc. announced that for fiscal 2012, it expects earnings per share to be in the range of $1.83 to $2.91 and Its business trends are solid and stable and contributing to comparable sales increased expectations between 1.5% and 2.5%.
  • On May 1, 2012, Ruby Tuesday, Inc. announced that it had commenced a private offering to eligible purchasers of Senior Notes due 2020, (Notes). The proceeds from the sale of the Notes will be used to repay all outstanding indebtedness under the Company's revolving credit facility, to redeem all of its outstanding Series B senior notes, to pay off certain of its outstanding mortgage loan obligations and for general corporate purposes, including without limitation to opportunistically repurchase shares of its outstanding common stock and to pursue potential strategic acquisitions.
  • On May 1, 2012, Rigrodsky & Long, P.A. announced that it is investigating potential claims against the board of directors of P.F. Chang's China Bistro, Inc. The investigation concerns possible breaches of fiduciary duty and other violations of law related to Centerbridge Partners, L.P.'s agreement to take the Company private in a deal valued at approximately $1.1 billion.
  • On April 24, 2012, Buffalo Wild Wings, Inc. announced that it expects to achieve net earnings growth of 20% for fiscal 2012. The Company reported net income of $50.43 million in fiscal 2011.
  • On March 29, 2012, Buffalo Wild Wings, Inc. announced that it expects net earnings growth of 20% in fiscal 2012.
  • On February 21, 2012, The Cheesecake Factory, Inc. announced that for first quarter of 2012, it expects comparable sales between 2% and 3% and diluted earnings per share to be between $0.34 and $0.36.
  • On February 7, 2012, Buffalo Wild Wings, Inc. announced that it expects to achieve 20% net earnings growth for fiscal 2012. According to I/B/E/S Estimates, analysts are expecting the Company to report EPS of $3.18 and net profit of $59 million for fiscal 2012.
  • On January 5, 2012, Ruby Tuesday, Inc. announced that for fiscal 2012, it expects same-restaurant sales for Company owned restaurants will be in the range of down 2.0% to down 4.0%.

Technical Insight


Darden Restaurants has been trading in an uptrend since December 2011 to reach 52 week highs of $55.84 in the middle of May. It has corrected about 10% since then. It is still trading above 200 SMA on the daily chart.

Sources: Yahoo Finance, Google Finance, Marketwatch, Finviz, Reuters.

Source: Earnings Preview: Darden Restaurants