Citi analyst Jon Tower has maintained their bullish stance on DRI stock, giving a Buy rating on March 7.
Jon Tower has given his Buy rating due to a combination of factors that suggest Darden’s stock (DRI) is positioned for ongoing growth. His optimism is rooted in the company’s ability to outperform industry trends despite facing challenges such as weather-related sales impacts. Tower recognizes Darden’s core brand strengths and operational efficiency as key drivers for maintaining their guidance for FY24. The company’s scale advantages and strong balance sheet further contribute to its capacity for continued market share gains within the highly fragmented US full-service restaurant category.
Further bolstering the Buy rating, Tower notes the improvement in industry data with the normalization of weather conditions and anticipates Darden’s management to pursue strategic price increases given the company’s historical pricing power. Additionally, stable foot traffic amidst industry fluctuations and a cautious yet positive outlook on consumer health have been factored into his analysis. These elements, coupled with Darden’s measured approach to promotional activity and marketing spend, underpin Tower’s confidence in the company’s future performance and justify the upward adjustment of the price target to $200.
Tower covers the Consumer Cyclical sector, focusing on stocks such as Starbucks, BJ’s Restaurants, and Chipotle. According to TipRanks, Tower has an average return of 16.2% and a 68.26% success rate on recommended stocks.
In another report released on March 7, Bernstein also maintained a Buy rating on the stock with a $190.00 price target.
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Darden (DRI) Company Description:
Darden Restaurants, Inc. is a full-service restaurant company, which engages in the provision of restaurant services. It operates through the following segments: Olive Garden, LongHorn Steakhouse, Fine Dining, and Other Business. The Olive Garden segment is the largest full-service dining Italian restaurant operator. The LongHorn Steakhouse segment includes the results of the company-owned LongHorn Steakhouse restaurants. The Fine Dining segment comprises of the premium brands that operate within the fine-dining sub-segment of full-service dining and includes the results of its company-owned The Capital Grille and Eddie V’s restaurants. The Other Business segment aggregates the remaining brands and includes the results of its company-owned Cheddar’s Scratch Kitchen, Yard House, Seasons 52 and Bahama Breeze restaurants; and from franchises and consumer-packaged goods sales. The company was founded by William B. Darden in 1938 and is headquartered in Orlando, FL.
Read More on DRI:
- Darden price target raised to $165 from $160 at BMO Capital
- Darden price target raised to $190 from $180 at TD Cowen
- Darden price target raised to $170 from $165 at JPMorgan
- JPMorgan downgrades Bloomin and Cheesecake Factory, upgrades Texas Roadhouse
- Wall Street chooses winners in restaurant space for 2024
