On Friday, Stephens raised the stock price target for Darden Restaurants (NYSE:DRI) to $175 from the previous $164 while maintaining an Equal Weight rating on the stock. With a current market capitalization of $21.4 billion and trading near its 52-week high, the stock has shown remarkable momentum, gaining over 10% in the past week.
This adjustment follows Darden's announcement of second-quarter fiscal year 2025 results, which exceeded expectations in key areas such as same-store sales, restaurant margins, and adjusted earnings per share. According to InvestingPro, the company appears slightly overvalued based on its proprietary Fair Value model.
Darden also revised its full-year 2025 comparable sales guidance, tightening the forecast to around 1.5%, an update from the previously stated range of 1.0% to 2.0%. The company's performance reflects positively on its operational execution, margin management, and the ability to leverage the size and scale of its portfolio.
With an overall financial health score of "GOOD" on InvestingPro, which evaluates multiple financial metrics, the company demonstrates solid operational fundamentals. Subscribers can access 12 additional ProTips and a comprehensive Pro Research Report for deeper insights.
The restaurant group, known for brands like Olive Garden and LongHorn Steakhouse, has outlined plans to drive sales in the second half of fiscal year 2025. These strategies include introducing new menu items and ramping up marketing efforts. Darden's commentary on an improving consumer macro environment was also highlighted, suggesting a favorable outlook for the casual dining industry.
Following the announcement on Thursday, Darden's shares are now trading at 11.4 times the next twelve months' (NTM) consensus EBITDA estimates. The new price target of $175 implies an enterprise value to EBITDA (EV/EBITDA) multiple of 11.0 times Stephens' next twelve months EBITDA forecast of $2.030 billion, compared to Darden's 10-year average trading multiple of 10.5 times.
In other recent news, Darden Restaurants has been the center of attention due to its impressive earnings and revenue results. The restaurant giant has been maintaining a positive trajectory, with its second quarter fiscal year 2025 performance exceeding expectations.
The same-store sales grew by 2.4%, surpassing the Street's expectation of 1.4%, leading the company to confidently reiterate its full-year 2025 earnings per share guidance, which is projected to be between $9.40 and $9.60.
Several financial firms have raised their price targets for Darden. Oppenheimer increased its price target to $200, maintaining an Outperform rating. KeyBanc Capital Markets also raised its price target to $200, maintaining an Overweight rating.
Baird increased Darden's price target to $194, maintaining a Neutral rating, while Raymond (NS:RYMD) James maintained an Outperform rating, raising the price target to $200. Lastly, Stifel raised its price target for Darden to $205, maintaining a Buy rating.
These adjustments followed Darden's strong second-quarter earnings and same-store sales growth. Olive Garden and Longhorn Steakhouse, chains under Darden Restaurants, have been performing exceptionally well. The company's solid financial health is evident in its consistent dividend payments, which it has maintained for 30 consecutive years. These are recent developments in Darden's financial journey.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.