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

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Darden Restaurants (DRI - Free Report) closed at $118.58 in the latest trading session, marking a +0.41% move from the prior day. The stock outpaced the S&P 500's daily loss of 0.11%. Meanwhile, the Dow lost 0.1%, and the Nasdaq, a tech-heavy index, lost 0.07%.

Coming into today, shares of the owner of Olive Garden and other chain restaurants had gained 3.27% in the past month. In that same time, the Retail-Wholesale sector gained 0.63%, while the S&P 500 gained 1.62%.

Investors will be hoping for strength from DRI as it approaches its next earnings release, which is expected to be December 19, 2019. In that report, analysts expect DRI to post earnings of $1.07 per share. This would mark 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.

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. With this in mind, we can consider positive estimate revisions a sign of optimism about 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. Within the past 30 days, our consensus EPS projection has moved 0.01% lower. DRI is currently a Zacks Rank #3 (Hold).

Digging into valuation, DRI currently has a Forward P/E ratio of 18.51. Its industry sports an average Forward P/E of 23.61, so we one might conclude that DRI is trading at a discount comparatively.

Investors should also note that DRI has a PEG ratio of 2.03 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. DRI's industry had an average PEG ratio of 2.23 as of yesterday's close.

The Retail - Restaurants industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 66, putting it in the top 26% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

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