Darden on the Street: Why Analysts Are Favoring ‘Hold’ Recommendations
As of June 21, analysts were expecting Darden’s stock price to reach $86.86 in the next 12-months, which implies a fall of 1.6% from its current level.
Analysts are expecting Darden Restaurants (DRI) to post EPS of $1.15 in fiscal 4Q17, which would be a growth of 5.3% over its $1.09 in fiscal 4Q16.
On June 21, 2017, Darden was trading at a PE multiple of 20x, as compared to 17.8x before the announcement of its fiscal 3Q17 earnings.
For fiscal 4Q17, analysts are expecting Darden Restaurants (DRI) to post EBIT of $203.6 million, which translates to an EBIT margin of 10.9%.
The majority of Darden’s total revenues (55.1%) came from Olive Garden in fiscal 3Q17, while 23.1% came from LongHorn Steakhouse.
In fiscal 3Q17, Darden posted adjusted EPS of $1.32 on revenue of $1.88 billion, as compared to the analyst estimate of $1.27 on revenue of $1.87 billion.
Of the 34 analysts that follow Chipotle, 26.5% are recommending “buy,” 58.8% are recommending “hold,” and 14.7% are recommending “sell.”
Analysts expect Chipotle’s earnings for the next four quarters to rise 175.4%, which could have been factored in the company’s current stock price.
Peter Saleh, an analyst at BTIG, retained his SSSG guidance for 2Q17. He’s cautious due to Chipotle’s weak sales in the West Coast and Northeast regions.
After posting better 1Q17 earnings on April 25, Chipotle’s stock price rose to $496.14 by May 16, 2017. Since then, it has experienced downward momentum.
Of the six analysts that follow Papa John’s, 50% recommend a “buy” and 50% recommend a “hold.” None of the analysts recommend a “sell.”
As of June 20, 2017, Papa John’s was trading at a forward PE multiple of 24.8x—compared to 27.3x before the announcement of its 1Q17 earnings.
For the next four quarters, analysts expect Papa John’s (PZZA) to post EPS (earnings per share) of $2.94, which represents growth of 11.4%.
For the next four quarters, analysts expect Papa John’s (PZZA) to post revenue of $1.83 billion, which represents growth of 5.5%.
Although Papa John’s (PZZA) 1Q17 earnings were better than expected, its stock is falling. As of June 20, 2017, Papa John’s was trading at $75.12.
Of the 24 analysts following Panera, none are recommending a “sell,” while 12.5% are recommending a “buy,” and 87.5% are recommending a “hold.”
As of June 14, 2017, Shake Shack was trading at a PE multiple of 69.1x compared to 60.7x before the announcement of its 1Q17 earnings.
With an EBIT margin of 9.2%, Panera Bread (PNRA) outperformed other fast casual restaurants in 1Q17.
EPS for all three fast casual restaurants we’re covering in this series rose in 1Q17. Chipotle Mexican Grill (CMG) outperformed its peers with a 281.8% rise in EPS.
Chipotle Mexican Grill (CMG) has outperformed other fast-casual restaurants by adding 225 restaurants in the last 12 months, which is a unit growth of 10.9%.