Zacks Investment Research Downgrades Darden Restaurants (DRI) to Hold

Darden Restaurants (NYSE:DRI) was downgraded by Zacks Investment Research from a “buy” rating to a “hold” rating in a note issued to investors on Monday, December 18th.

According to Zacks, “Darden’s shares outpaced its industry so far this year. Most of its brands have witnessed growth over the past few quarters, given various sales initiatives like simplifying kitchen systems, operational excellence to enhance guest experience, menu innovation along with technology-driven moves. The acquisition of Cheddar's has added an undisputed casual dining value leader to Darden's portfolio of differentiated brands, which is expected to further drive comps. Initiatives to attract guests at Olive Garden, LongHorn and other units also bode well. Further, Darden’s efforts to check costs are commendable. Backed by these efforts, Darden’s first-quarter fiscal 2018 earnings topped the Zacks Consensus Estimate for the 12th consecutive quarter. Yet, rising labor costs and a non-franchised business model are likely to dampen the company’s profits, while a soft industry backdrop might pressurize comps.”

Several other brokerages have also commented on DRI. SunTrust Banks set a $94.00 price target on Darden Restaurants and gave the company a “hold” rating in a research note on Monday, December 11th. Robert W. Baird restated a “hold” rating and set a $94.00 price target on shares of Darden Restaurants in a research note on Tuesday, September 19th. Oppenheimer reiterated a “buy” rating and issued a $100.00 target price on shares of Darden Restaurants in a research note on Wednesday, September 20th. Morgan Stanley reiterated an “equal weight” rating and issued a $88.00 target price (down previously from $93.00) on shares of Darden Restaurants in a research note on Wednesday, September 27th. Finally, Credit Suisse Group cut their target price on Darden Restaurants from $85.00 to $82.00 and set a “neutral” rating on the stock in a research note on Wednesday, September 27th. One equities research analyst has rated the stock with a sell rating, sixteen have given a hold rating and ten have given a buy rating to the company. The company presently has a consensus rating of “Hold” and a consensus price target of $95.18.

Shares of Darden Restaurants (NYSE:DRI) traded up $0.81 on Monday, reaching $97.60. The company had a trading volume of 1,277,400 shares, compared to its average volume of 1,830,000. Darden Restaurants has a 12 month low of $71.43 and a 12 month high of $100.11. The company has a market capitalization of $12,070.00, a P/E ratio of 24.58, a PEG ratio of 2.11 and a beta of 0.20. The company has a debt-to-equity ratio of 0.47, a quick ratio of 0.20 and a current ratio of 0.34.

Hedge funds have recently made changes to their positions in the company. Bruderman Asset Management LLC grew its holdings in Darden Restaurants by 0.4% in the 2nd quarter. Bruderman Asset Management LLC now owns 2,532 shares of the restaurant operator’s stock valued at $229,000 after buying an additional 10 shares in the last quarter. D.A. Davidson & CO. grew its holdings in Darden Restaurants by 1.7% in the 2nd quarter. D.A. Davidson & CO. now owns 1,271 shares of the restaurant operator’s stock valued at $114,000 after buying an additional 21 shares in the last quarter. Commonwealth of Pennsylvania Public School Empls Retrmt SYS grew its holdings in Darden Restaurants by 0.3% in the 2nd quarter. Commonwealth of Pennsylvania Public School Empls Retrmt SYS now owns 9,238 shares of the restaurant operator’s stock valued at $835,000 after buying an additional 28 shares in the last quarter. Peddock Capital Advisors LLC grew its holdings in Darden Restaurants by 0.7% in the 2nd quarter. Peddock Capital Advisors LLC now owns 9,524 shares of the restaurant operator’s stock valued at $861,000 after buying an additional 65 shares in the last quarter. Finally, BB&T Securities LLC lifted its stake in shares of Darden Restaurants by 0.3% in the 2nd quarter. BB&T Securities LLC now owns 35,622 shares of the restaurant operator’s stock valued at $3,221,000 after purchasing an additional 90 shares during the last quarter. 91.45% of the stock is owned by institutional investors and hedge funds.

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Darden Restaurants Company Profile

Darden Restaurants, Inc is a full-service restaurant company. The Company owned and operated 1,536 restaurants through its subsidiaries in the United States and Canada, as of May 29, 2016. The Company’s segments include Olive Garden, LongHorn Steakhouse, Fine Dining (which includes The Capital Grille, and Eddie V’s Prime Seafood and Wildfish Seafood Grille (Eddie V’s)) and Other Business (which includes Yard House, Seasons 52, Bahama Breeze, consumer-packaged goods and franchise revenues).

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