On 24 February 2019, Darden Restaurants, Inc. (NYSE:DRI) announced its earnings update. Overall, analyst consensus outlook appear cautiously subdued, with profits predicted to rise by 14% next year against the higher past 5-year average growth rate of 32%. With trailing-twelve-month net income at current levels of US$604m, we should see this rise to US$690m in 2020. Below is a brief commentary on the longer term outlook the market has for Darden Restaurants. For those keen to understand more about other aspects of the company, you can research its fundamentals here.
How will Darden Restaurants perform in the near future?
The view from 22 analysts over the next three years is one of positive sentiment. Given that it becomes hard to forecast far into the future, broker analysts tend to project ahead roughly three years. To understand the overall trajectory of DRI's earnings growth over these next fews years, I've fitted a line through these analyst earnings forecast to determine an annual growth rate from the slope.
By 2022, DRI's earnings should reach US$785m, from current levels of US$604m, resulting in an annual growth rate of 8.2%. This leads to an EPS of $7.18 in the final year of projections relative to the current EPS of $4.87. Margins are currently sitting at 7.5%, which is expected to expand to 8.4% by 2022.
Future outlook is only one aspect when you're building an investment case for a stock. For Darden Restaurants, there are three fundamental aspects you should further research:
- Financial Health: Does it have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk.
- Valuation: What is Darden Restaurants worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether Darden Restaurants is currently mispriced by the market.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Darden Restaurants? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.