Back to top

Image: Bigstock

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

Read MoreHide Full Article

In the latest trading session, Darden Restaurants (DRI - Free Report) closed at $146.72, marking a +0.34% move from the previous day. This move outpaced the S&P 500's daily loss of 0.72%.

Heading into today, shares of the owner of Olive Garden and other chain restaurants had gained 1.34% over the past month, lagging the Retail-Wholesale sector's gain of 2.26% and the S&P 500's gain of 6.13% in that time.

Investors will be hoping for strength from DRI as it approaches its next earnings release. On that day, DRI is projected to report earnings of $1.71 per share, which would represent year-over-year growth of 237.9%. Meanwhile, our latest consensus estimate is calling for revenue of $2.12 billion, up 67.25% from the prior-year quarter.

DRI's full-year Zacks Consensus Estimates are calling for earnings of $3.96 per share and revenue of $7.04 billion. These results would represent year-over-year changes of +26.52% and -9.82%, respectively.

Any recent changes to analyst estimates for DRI should also be noted by investors. These revisions help to show the ever-changing nature of near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Our research shows that these estimate changes are directly correlated with near-term stock prices. 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.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 1.48% higher within the past month. DRI is holding a Zacks Rank of #1 (Strong Buy) right now.

In terms of valuation, DRI is currently trading at a Forward P/E ratio of 36.88. This valuation marks a discount compared to its industry's average Forward P/E of 40.62.

Investors should also note that DRI has a PEG ratio of 3.69 right now. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. Retail - Restaurants stocks are, on average, holding a PEG ratio of 3.3 based on yesterday's closing prices.

The Retail - Restaurants industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 118, putting it in the top 47% 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.


In-Depth Zacks Research for the Tickers Above


Normally $25 each - click below to receive one report FREE:


Darden Restaurants, Inc. (DRI) - free report >>

Published in