In the latest trading session, Darden Restaurants (DRI - Free Report) closed at $111.35, marking a -0.91% move from the previous day. This change lagged the S&P 500's daily gain of 0.56%. At the same time, the Dow added 0.49%, and the tech-heavy Nasdaq gained 1.01%.
Heading into today, shares of the owner of Olive Garden and other chain restaurants had lost 3.5% over the past month, lagging the Retail-Wholesale sector's gain of 0.67% and the S&P 500's gain of 1.38% 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 $1.07 per share, which would represent year-over-year growth of 16.3%. Meanwhile, our latest consensus estimate is calling for revenue of $2.06 billion, up 4.29% from the prior-year quarter.
DRI's full-year Zacks Consensus Estimates are calling for earnings of $6.38 per share and revenue of $9.03 billion. These results would represent year-over-year changes of +9.62% and +6.08%, respectively.
It is also important to note the recent changes to analyst estimates for DRI. These revisions typically reflect the latest short-term business trends, which can change frequently. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.
Based on our research, we believe these estimate revisions are directly related to near-team stock moves. 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 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 0.04% higher within the past month. DRI is currently sporting a Zacks Rank of #3 (Hold).
Valuation is also important, so investors should note that DRI has a Forward P/E ratio of 17.61 right now. For comparison, its industry has an average Forward P/E of 22.84, which means DRI is trading at a discount to the group.
Also, we should mention that DRI has a PEG ratio of 1.98. 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. The Retail - Restaurants industry currently had an average PEG ratio of 2.01 as of yesterday's close.
The Retail - Restaurants industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 150, putting it in the bottom 42% 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.
You can find more information on all of these metrics, and much more, on Zacks.com.