Darden Restaurants (DRI) Gains But Lags Market: What You Should Know
Darden Restaurants (DRI) closed the most recent trading day at $134, moving +0.51% from the previous trading session. This move lagged the S&P 500's daily gain of 1.19%. Elsewhere, the Dow gained 1.34%, while the tech-heavy Nasdaq lost 0.18%.
Prior to today's trading, shares of the owner of Olive Garden and other chain restaurants had gained 8.93% over the past month. This has outpaced the Retail-Wholesale sector's loss of 1.64% and the S&P 500's loss of 0.84% in that time.
Wall Street will be looking for positivity from Darden Restaurants as it approaches its next earnings report date. In that report, analysts expect Darden Restaurants to post earnings of $1.41 per share. This would mark a year-over-year decline of 4.73%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $2.42 billion, up 6.56% from the year-ago period.
Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $7.68 per share and revenue of $10.3 billion. These totals would mark changes of +3.78% and +6.91%, respectively, from last year.
It is also important to note the recent changes to analyst estimates for Darden Restaurants. Recent revisions tend to reflect the latest near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.
Based on our research, we believe these estimate revisions are directly related to near-team stock moves. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.
The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 0.2% lower within the past month. Darden Restaurants is holding a Zacks Rank of #3 (Hold) right now.
Valuation is also important, so investors should note that Darden Restaurants has a Forward P/E ratio of 17.35 right now. Its industry sports an average Forward P/E of 21.58, so we one might conclude that Darden Restaurants is trading at a discount comparatively.
Investors should also note that DRI has a PEG ratio of 1.75 right now. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. The Retail - Restaurants industry currently had an average PEG ratio of 1.92 as of yesterday's close.
The Retail - Restaurants industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 75, putting it in the top 30% of all 250+ industries.
The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.
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