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What Analysts Recommend for Darden after Fiscal 3Q18 Earnings

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Target price

As of March 22, Darden Restaurants (DRI) was trading at $85.94. On the same day, analysts were expecting the company’s stock price to reach $101.23 in the next 12 months, which represents a return potential of 17.8%.

The lower-than-expected fiscal 3Q18 SSSG (same-store sales growth) and revenue appear to have compelled analysts to lower their target price. Since the announcement of the fiscal 3Q18 earnings, Barclays cut its target price from $116 to $105, Morgan Stanley lowered its target price from $97 to $90, and Wells Fargo lowered its target price from $99 to $88.

The target price and return potential for Darden’s peers are as follows:

  • Texas Roadhouse (TXRH): a target price of $60.58 with a return potential of 4.8%
  • Brinker International (EAT): a target price of $39.25 with a return potential of 13.3%
  • Bloomin’ Brands (BLMN): a target price of $23.90 with a return potential of 0.8%
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Analysts’ recommendations

Of the 27 analysts who follow Darden, 40.7% are favoring a “buy,” 55.6% are favoring a “hold,” and 3.7% are favoring a “sell” option. Darden’s stock price moves in tandem with analysts’ ratings. When analysts raise their target prices, the stock price for the company rises, and vice versa. Currently, Darden is trading below analysts’ 12-month target price.

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