Darden Restaurants: The Market Is Liking What It Sees

Sep. 19, 2024 11:25 AM ETDarden Restaurants, Inc. (DRI) StockDRI
(7min)

Summary

  • Darden Restaurants faced a challenging quarter with both revenue and earnings missing estimates, but favorable annual guidance and improving sales trends are driving the stock rally.
  • Comparable sales were down overall, but LongHorn Steakhouse showed strong performance with a 3.7% increase, while other segments like Olive Garden and fine dining struggled.
  • Despite the misses, Darden's dividend yield of 3.0% and ongoing share repurchases, coupled with expected future dividend increases, make it a solid long-term hold.
  • With EPS guidance of $9.40 to $9.60 and improving traffic and sales, Darden is well-positioned for growth, especially as interest rates are cut.
  • Looking for a helping hand in the market? Members of BAD BEAT Investing get exclusive ideas and guidance to navigate any climate. Learn More »

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We have had a hold rating since a successful public trade on Darden Restaurants, Inc. (NYSE:DRI) earlier this year. We closed the trade but suggested leaving some profit in the name for a

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Analyst’s Disclosure:I/we have a beneficial long position in the shares of DRI either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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