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Darden Restaurants (DRI) Stock Sinks As Market Gains: What You Should Know

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Darden Restaurants (DRI) closed the most recent trading day at $140.22, moving -1.25% from the previous trading session. This move lagged the S&P 500's daily gain of 0.26%.

Prior to today's trading, shares of the owner of Olive Garden and other chain restaurants had gained 0.18% over the past month. This has outpaced the Retail-Wholesale sector's loss of 3.65% and lagged the S&P 500's gain of 2.37% in that time.

Wall Street will be looking for positivity from DRI as it approaches its next earnings report date. On that day, DRI is projected to report earnings of $1.64 per share, which would represent year-over-year growth of 192.86%. Meanwhile, our latest consensus estimate is calling for revenue of $2.24 billion, up 46.45% from the prior-year quarter.

DRI's full-year Zacks Consensus Estimates are calling for earnings of $7.50 per share and revenue of $9.4 billion. These results would represent year-over-year changes of +74.01% and +30.59%, respectively.

It is also important to note the recent changes to analyst estimates for DRI. Recent revisions tend to reflect the latest near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 1.07% higher. DRI is holding a Zacks Rank of #3 (Hold) right now.

Investors should also note DRI's current valuation metrics, including its Forward P/E ratio of 18.94. For comparison, its industry has an average Forward P/E of 25.4, which means DRI is trading at a discount to the group.

Investors should also note that DRI has a PEG ratio of 1.89 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 was holding an average PEG ratio of 3 at yesterday's closing price.

The Retail - Restaurants industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 105, putting it in the top 42% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual 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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