What to Expect From Darden Earnings

October 3, 2016 by Chris Lange

Darden Restaurants Inc. (NYSE: DRI) is scheduled to report its fiscal first-quarter earnings results before the markets open on Tuesday. The consensus estimates from Thomson Reuters call for $0.82 in earnings per share (EPS) on revenue of $1.72 billion. The same period from last year reportedly had EPS of $0.68 and $1.69 billion in revenue.

This is one of the largest casual dining restaurant operators worldwide, with operations in the United States and Canada and over 1,500 restaurants as of May 2016. Darden operates restaurants under the Olive Garden, Longhorn Steakhouse, Bahama Breeze, Seasons 52, The Capital Grille, Eddie V’s and Yard House brand names.

Management returns much of its free cash to shareholders through share repurchases and dividends. With consumers having extra cash to spend as gasoline prices continue to stay low, the stock makes good sense for investors.

Ahead of the earnings report, a few analysts weighed in on Darden:

  • Stifel has a Sell rating with a $50 price target.
  • RBC Capital Markets reiterated a Sector Perform rating with a $70 price target.
  • Wells Fargo reiterated a Market Perform rating with a $68 price target.
  • Morgan Stanley reiterated a Hold rating with a $67 price target.
  • Robert Baird reiterated a Neutral rating.
  • Oppenheimer reiterated an Outperform rating with a $70 price target.
  • BMO Capital Market reiterated a Hold rating with a $64 price target.

So far in 2016, Darden has underperformed the broad markets, with the stock down about 2%. Over the past 52 weeks, the stock was down 8%.

Shares of Darden were trading down 1.4% at $60.48 on Monday, with a consensus analyst price target of $69.22 and a 52-week trading range of $53.38 to $68.97.

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