Darden Restaurants (DRI - Free Report) closed the most recent trading day at $114.36, moving -0.48% from the previous trading session. This change lagged the S&P 500's 0.2% loss on the day. Meanwhile, the Dow gained 0.04%, and the Nasdaq, a tech-heavy index, lost 0.13%.
Prior to today's trading, shares of the owner of Olive Garden and other chain restaurants had gained 2.57% over the past month. This has lagged the Retail-Wholesale sector's gain of 6.5% and the S&P 500's gain of 7.08% in that time.
DRI will be looking to display strength as it nears 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.
For the full year, our Zacks Consensus Estimates are projecting earnings of $6.38 per share and revenue of $9.03 billion, which would represent changes of +9.62% and +6.08%, respectively, from the prior year.
It is also important to note the recent changes to analyst estimates for DRI. These revisions help to show the ever-changing nature of near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.
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, 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. The Zacks Consensus EPS estimate remained stagnant within the past month. DRI currently has a Zacks Rank of #3 (Hold).
In terms of valuation, DRI is currently trading at a Forward P/E ratio of 18. This represents a discount compared to its industry's average Forward P/E of 23.05.
We can also see that DRI currently has a PEG ratio of 2.03. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. The Retail - Restaurants was holding an average PEG ratio of 2.1 at yesterday's closing price.
The Retail - Restaurants industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 105, putting it in the top 42% 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.
You can find more information on all of these metrics, and much more, on Zacks.com.