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Darden Presents 'Attractive Entry Point' For Investors With Less Negative Macro Outlook, Says Analyst

·1 min read
  • Raymond James analyst Brian M.Vaccaro reiterated an Outperform rating on the shares of Darden Restaurants Inc (NYSE: DRI) with a price target of $136.00.

  • The analyst expects in-line 1Q23 sales and EPS results.

  • While broader recession and rate concerns have re-intensified after last week’s inflation and FedEx Corp (NYSE: FDX) headlines, demand for U.S. restaurants remains resilient, said Vaccaro.

  • He added that lower gas prices, still solid labor market and wage growth conditions, and the buffer of excess savings for middle/upper-income consumers seem to be supportive.

  • Also ReadWhy 40% Of Monthly U.S. Food Budgets Are Spent On Restaurants: Report

  • Vaccaro thinks the company’s shares trade at the lower end of the stock’s historical valuation range with an attractive dividend (nearly 4%), continuing to present an attractive entry point for investors with a less negative macro outlook.

  • He also is of the opinion that Darden is a high-quality, full-service restaurant company characterized by a portfolio of high AUV/margin brands, a best-in-class management team, scale, and systems, and a strong cash flow profile.

  • Price Action: DRI shares are trading higher by 1.55% at $131.69 on the last check Monday.

  • Photo Via Wikimedia Commons

Latest Ratings for DRI

Date

Firm

Action

From

To

Dec 2021

Stifel

Upgrades

Hold

Buy

Dec 2021

Stephens & Co.

Maintains

Overweight

Dec 2021

MKM Partners

Maintains

Buy

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