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Darden Restaurants (DRI) Outpaces Stock Market Gains: What You Should Know

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Darden Restaurants (DRI - Free Report) closed at $151.17 in the latest trading session, marking a +0.35% move from the prior day. This change outpaced the S&P 500's 0.03% gain on the day.

Coming into today, shares of the owner of Olive Garden and other chain restaurants had gained 2.6% in the past month. In that same time, the Retail-Wholesale sector gained 0.9%, while the S&P 500 gained 3.02%.

DRI will be looking to display strength as it nears its next earnings release, which is expected to be September 23, 2021. On that day, DRI is projected to report earnings of $1.89 per share, which would represent year-over-year growth of 237.5%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $2.23 billion, up 46.26% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $7.47 per share and revenue of $9.39 billion, which would represent changes of +73.32% and +30.44%, respectively, from the prior year.

It is also important to note the recent changes to analyst estimates for DRI. These recent revisions tend to reflect the evolving nature of short-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 0.67% higher. DRI is holding a Zacks Rank of #3 (Hold) right now.

Investors should also note DRI's current valuation metrics, including its Forward P/E ratio of 20.17. Its industry sports an average Forward P/E of 25.68, so we one might conclude that DRI is trading at a discount comparatively.

Investors should also note that DRI has a PEG ratio of 2.02 right now. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. DRI's industry had an average PEG ratio of 3.01 as of yesterday's close.

The Retail - Restaurants industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 121, putting it in the top 48% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our 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.

To follow DRI in the coming trading sessions, be sure to utilize Zacks.com.


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