Growing Through Challenges? – Darden Restaurants Inc. (DRI)

The Vanguard Group, Inc. recently announced the acquisition of new stake in Darden Restaurants Inc. (NYSE:DRI). The institutional investor has increased its shareholding in the Consumer Cyclical company by 0.37% to 13.75 million shares with purchase of 50904.0 shares. This fresh investment now brings its stake to 11.30% valued currently at $1.97 billion. In addition, BlackRock Fund Advisors raised its holdings by 0.15 million to 6.22 million shares. And Geode Capital Management LLC has lifted its position by 1.85% or 45661.0 shares – to 2.51 million shares.

With over 2.07 million Darden Restaurants Inc. (DRI) shares trading Tuesday and a closing price of $147.58 on the day, the dollar volume was approximately $304.93 million. The shares have shown a positive half year performance of 10.36% and its price on 03/14/23 gained nearly 1.07%. Currently, there are 122.10M common shares owned by the public and among those 121.41M shares have been available to trade.

An analysis of what Wall Street brokers have to say about the expected price targets for this stock gives us this picture: 30 analysts who have offered their price forecasts for DRI have a consensus price objective of $157.62. The analysts have set the share’s price value over the next 12 months at a high of $175.00 and a low of $133.00. The average price target is 5.86% above its recent price level and a downside to the estimated low will see the stock lose -10.96% over that period. But an upside of 15.67% will see the stock hit the forecast high price target while median target price for the stock is $158.50.

Insiders at the company have transacted a total of 117 times over the past 12 months, according to data filed with the U.S. Securities and Exchange Commission (SEC). 52 of these insider trades were purchases, accounting for 156,039 shares. Insider sales of the common stock occurred on 65 occasions, with total insider shares sold totaling 144,395 shares.

The top 3 mutual fund holders in Darden Restaurants Inc. are Washington Mutual Investors Fund, American Funds Income Fund of Ame, and American Balanced Fund. Washington Mutual Investors Fund owns 6.62 million shares of the company’s stock, all valued at over $946.28 million. The company sold -1.06 million shares recently to bring their total holdings to about 5.44% of the shares outstanding. American Funds Income Fund of Ame sold -0.89 million shares to see its total holdings shrink to 4.75 million shares valued at over $679.41 million and representing 3.90% of the shares outstanding. American Balanced Fund sold -0.6 million shares to bring its total holdings to over 4.72 million shares at a value of $674.4 million. American Balanced Fund now owns shares totaling to 3.88% of the shares outstanding.

Shares of Darden Restaurants Inc. (NYSE: DRI) opened at $147.76, up $1.74 from a prior closing price of $146.02. However, the script later moved the day high at 149.96, up 1.07%. The company’s stock has a 5-day price change of 0.72% and 3.51% over the past three months. DRI shares are trading 6.69% year to date (YTD), with the 12-month market performance up to 14.40% higher. It has a 12-month low price of $110.96 and touched a high of $152.08 over the same period. DRI has an average intraday trading volume of 1.16 million shares. The stock is trading above its simple moving averages at the SMA20, SMA50, and SMA200, as the current price level is off by 1.04%, 0.69%, and 10.02% respectively.

Institutional ownership of Darden Restaurants Inc. (NYSE: DRI) shares accounts for 92.00% of the company’s 122.10M shares outstanding. Mutual fund holders own 58.19%, while other institutional holders and individual stakeholders account for 8.94% and 33.12% respectively.

It has a market capitalization of $18.05B and a beta (3y monthly) value of 1.21. The stock’s trailing 12-month PE ratio is 20.33, while the earnings-per-share (ttm) stands at $7.26. The company has a PEG of 2.27 and a Quick Ratio of 0.30 with the debt-to-equity ratio at 1.01. Price movements for the stock have been influenced by the stock’s volatility, which stands at 2.43% over the week and 2.02% over the month.

Analysts forecast that Darden Restaurants Inc. (DRI) will achieve an EPS of $2.21 for the current quarter, $2.52 for the next quarter and $8.65 for 2024. The lowest estimate earnings-per-share for the quarter is $2.09 while analysts give the company a high EPS estimate of $2.4. Comparatively, EPS for the current quarter was $1.91 a year ago. Earnings per share for the fiscal year are expected to increase by 54.20%, and 10.65% over the next financial year. EPS should shrink at an annualized rate of 8.95% over the next five years, compared to 14.10% over the past 5-year period.

If you are looking to buy this stock, then you may note that the average analyst recommendation by 30 brokerage firm advisors rate Darden Restaurants Inc. (DRI) as a “Moderate Buy” at a consensus score of 2.00. Specifically, 17 Wall Street analysts polled rate the stock as a buy, while 10 of the 30 advise that investors “hold,” and 0 rated it as a “Sell.”

Looking at the support for the DRI, a number of firms have released research notes about the stock. Guggenheim stated their Buy rating for the stock in a research note on February 02, 2023, with the firm’s price target at $170. Wells Fargo coverage for the Darden Restaurants Inc. (DRI) stock in a research note released on January 24, 2023 offered a Equal Weight rating with a price target of $155. Wedbush was of a view on December 14, 2022 that the stock is Outperform, while Robert W. Baird gave the stock Neutral rating on November 29, 2022, issuing a price target of $134- $150. Stephens on their part issued Overweight rating on September 23, 2022.