As of March 25, 2016, Darden Restaurants (DRI) was trading at $65.80. The share price may have already priced in the estimates that we’ve discussed in the earlier articles. In this article, we’ll look at analysts’ recommendations and estimated price targets over the next 12 months
Currently, analysts are expecting Darden, which forms 0.27% of the iShares US Consumer Services ETF (IYC), to reach $70.70 over the next 12 months, which would represent a return of 7.5%. The announcement of higher same-store sales growth and EPS guidance for 3Q16 by Darden’s management have prompted analysts to revise their estimates upward from $68.20 to $70.70.
On the higher side, Jeffrey A. Bernstein of Barclays has estimated that it could reach $81. On the lower side, Karen Holthouse of Goldman Sachs has estimated that it could reach $63.
Among Darden’s peers, Texas Roadhouse (TXRH) has a return potential of 1% over the next 12 months. Bloomin’ Brands (BLMN) and Brinker International (EAT) are expected to return 23.1% and 19.7%, respectively.
According to a Bloomberg consensus, of the 29 analysts surveyed, 41.4% have “buy” recommendations for DRI, 51.7% have “hold” recommendations, and 6.9% have “sell” recommendations. As the analysts raise their target price for the next 12 months, the share price of the stock may also increase, and vice versa.
A share price that is lower than the target price doesn’t mean an automatic buy. Before investing, you should carefully analyze the various metrics we’ve covered in this series.