Darden Restaurants, Inc. (DRI) is a major player in the full-service dining industry, with a market cap of approximately $20 billion. The company operates a vast network of over 1,700 restaurants under various well-known brands such as Olive Garden, LongHorn Steakhouse, The Capital Grille, and Cheddar’s Scratch Kitchen, offering a diverse range of dining experiences to customers in the U.S. and Canada.
Despite its strong presence in the market, Darden Restaurants has seen its stock underperforming in the past year. Over the last 52 weeks, DRI stock has only risen by 5.1%, while the broader S&P 500 Index has surged by 14.5%. Year-to-date, Darden’s shares are down by 5.9%, compared to the S&P 500’s gain of 16.5%. Additionally, the company has also lagged behind the Consumer Discretionary Select Sector SPDR Fund’s 9.9% return over the same period.
In a recent development, Darden Restaurants saw its shares plummet by 7.7% on September 18th following the release of its Q1 2026 financial results. The company reported adjusted EPS of $1.97, falling short of Wall Street estimates. While quarterly sales met forecasts at $3.04 billion, operating costs surged by 8.8% to $2.71 billion due to higher ingredient and marketing expenses. Despite management raising its annual sales growth outlook to 7.5% – 8.5%, the midpoint of the range slightly missed analysts’ expectations, leading to a negative investor response.
Looking ahead, analysts are forecasting DRI’s adjusted EPS to grow by 11.1% year-over-year to $10.61 for the fiscal year ending in May 2026. The company’s earnings surprise history has been mixed, with one beat and three misses in the last four quarters. Among the 30 analysts covering the stock, the consensus rating is a “Moderate Buy,” consisting of 17 “Strong Buy” ratings, two “Moderate Buy” ratings, and 11 “Hold” ratings.
In a recent update, BMO Capital lowered Darden’s price target to $205 on September 19th while maintaining a “Market Perform” rating. This adjustment reflects the ongoing challenges and uncertainties facing the company in the current market environment.
Overall, Darden Restaurants continues to face headwinds in the market, but analysts remain cautiously optimistic about its future performance. Investors will be closely watching how the company navigates these challenges and executes its growth strategies in the coming quarters.
