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In the latest trading session, Darden Restaurants (DRI) closed at $148.40, marking a +1.03% move from the previous day. The stock outpaced the S&P 500’s daily gain of 0.17%. Elsewhere, the Dow gained 0.55%, while the tech-heavy Nasdaq lost 0.44%.
Prior to today’s trading, shares of the owner of Olive Garden and other chain restaurants had gained 2.38% over the past month. This has outpaced the Retail-Wholesale sector’s gain of 1.41% and lagged the S&P 500’s gain of 3.19% in that time.
Wall Street will be looking for positivity from Darden Restaurants as it approaches its next earnings report date. The company is expected to report EPS of $1.43, up 93.24% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $2.22 billion, up 34.17% from the prior-year quarter.
DRI’s full-year Zacks Consensus Estimates are calling for earnings of $7.62 per share and revenue of $9.54 billion. These results would represent year-over-year changes of +76.8% and +32.51%, respectively.
Investors should also note any recent changes to analyst estimates for Darden Restaurants. These recent revisions tend to reflect the evolving nature of short-term business trends. As such, positive estimate revisions reflect analyst optimism about the company’s business and profitability.
Based on our research, we believe these estimate revisions are directly related to near-team stock moves. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.
The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 0.23% higher. Darden Restaurants currently has a Zacks Rank of #2 (Buy).
In terms of valuation, Darden Restaurants is currently trading at a Forward P/E ratio of 19.27. For comparison, its industry has an average Forward P/E of 20.84, which means Darden Restaurants is trading at a discount to the group.
Also, we should mention that DRI has a PEG ratio of 1.93. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock’s expected earnings growth rate. The Retail – Restaurants industry currently had an average PEG ratio of 2.18 as of yesterday’s close.
The Retail – Restaurants industry is part of the Retail-Wholesale sector. This industry currently has a Zacks Industry Rank of 211, which puts it in the bottom 17% of all 250+ industries.
The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.
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