Darden Restaurants Inc. (NYSE:DRI) was downgraded by Zacks Investment Research from a “hold” rating to a “sell” rating in a research report issued to clients and investors on Tuesday.
According to Zacks, “Darden provided a weak guidance for fiscal 2017 earnings at the fiscal fourth quarter conference call. Moreover, though the company posted positive comps across all brands in the fiscal fourth quarter, the figures compared unfavorably with the prior-quarter comps. The company also witnessed a decline in sales across all its segments in the quarter. Going forward, sales initiatives like simplifying kitchen systems, menu innovation coupled with technology-driven moves should boost the top line. Estimates have been mostly stable lately ahead of Darden’s first-quarter fiscal 2017 earnings release. Meanwhile, the company has positive record of earnings surprises in recent quarters. However, we are yet to see sustained improvement in its flagship brand, Olive Garden. Moreover, Darden’s rising labor costs and a non-franchised business model might dampen profits, while a soft consumer spending environment could keep comps under pressure.”
DRI has been the subject of a number of other research reports. Jefferies Group reaffirmed a “hold” rating and set a $64.00 price objective (down previously from $66.00) on shares of Darden Restaurants in a research report on Saturday, July 2nd. BMO Capital Markets restated a “hold” rating and issued a $64.00 target price on shares of Darden Restaurants in a research report on Thursday, September 1st. Piper Jaffray Cos. restated an “overweight” rating and issued a $76.00 target price on shares of Darden Restaurants in a research report on Thursday, August 25th. BTIG Research restated a “buy” rating and issued a $75.00 target price on shares of Darden Restaurants in a research report on Friday, July 1st. Finally, Robert W. Baird restated a “neutral” rating and issued a $70.00 target price on shares of Darden Restaurants in a research report on Tuesday, June 28th. Three investment analysts have rated the stock with a sell rating, nine have given a hold rating and eleven have assigned a buy rating to the company’s stock. Darden Restaurants presently has an average rating of “Hold” and an average target price of $71.06.
Darden Restaurants (NYSE:DRI) opened at 62.36 on Tuesday. The stock has a market capitalization of $7.87 billion, a PE ratio of 21.52 and a beta of 0.52. The stock’s 50 day moving average is $62.06 and its 200-day moving average is $64.20. Darden Restaurants has a 52 week low of $53.38 and a 52 week high of $72.11.
Darden Restaurants (NYSE:DRI) last announced its quarterly earnings data on Thursday, June 30th. The restaurant operator reported $1.10 earnings per share for the quarter, beating analysts’ consensus estimates of $1.08 by $0.02. Darden Restaurants had a net margin of 5.41% and a return on equity of 21.95%. The business earned $1.79 billion during the quarter. During the same period in the prior year, the company earned $1.01 EPS. Darden Restaurants’s quarterly revenue was down 4.7% on a year-over-year basis. Equities research analysts forecast that Darden Restaurants will post $3.87 EPS for the current year.
In related news, Director James P. Fogarty acquired 3,000 shares of the company’s stock in a transaction on Thursday, July 7th. The shares were purchased at an average price of $61.70 per share, for a total transaction of $185,100.00. Following the purchase, the director now owns 7,890 shares in the company, valued at $486,813. The acquisition was disclosed in a document filed with the SEC, which can be accessed through this hyperlink. 0.68% of the stock is currently owned by company insiders.
A number of hedge funds and other institutional investors have recently added to or reduced their stakes in DRI. Norges Bank bought a new position in Darden Restaurants during the fourth quarter valued at $93,648,000. Schroder Investment Management Group raised its position in Darden Restaurants by 291.5% in the second quarter. Schroder Investment Management Group now owns 1,725,904 shares of the restaurant operator’s stock valued at $109,319,000 after buying an additional 1,285,004 shares in the last quarter. WBI Investments Inc. bought a new position in Darden Restaurants during the second quarter valued at $57,165,000. Numeric Investors LLC raised its position in Darden Restaurants by 228.9% in the second quarter. Numeric Investors LLC now owns 1,272,100 shares of the restaurant operator’s stock valued at $80,575,000 after buying an additional 885,300 shares in the last quarter. Finally, Bank of Montreal Can bought a new position in Darden Restaurants during the second quarter valued at $53,974,000. Hedge funds and other institutional investors own 94.57% of the company’s stock.
Darden Restaurants Company Profile
Darden Restaurants, Inc is a full-service restaurant company. The Company owned and operated 1,536 restaurants through its subsidiaries in the United States and Canada, as of May 29, 2016. The Company’s segments include Olive Garden, LongHorn Steakhouse, Fine Dining (which includes The Capital Grille, and Eddie V’s Prime Seafood and Wildfish Seafood Grille (Eddie V’s)) and Other Business (which includes Yard House, Seasons 52, Bahama Breeze, consumer-packaged goods and franchise revenues).
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