Darden Restaurants (DRI) Gains But Lags Market: What You Should Know
Darden Restaurants (DRI) closed at $148.12 in the latest trading session, marking a +1.01% move from the prior day.
Darden Restaurants (DRI) closed at $148.12 in the latest trading session, marking a +1.01% move from the prior day. This change lagged the S&P 500's 2.07% gain on the day. Meanwhile, the Dow gained 1.4%, and the Nasdaq, a tech-heavy index, added 0.49%.
Prior to today's trading, shares of the owner of Olive Garden and other chain restaurants had lost 4.39% over the past month. This has was narrower than the Retail-Wholesale sector's loss of 4.8% and lagged the S&P 500's loss of 2.08% in that time.
Darden Restaurants will be looking to display strength as it nears its next earnings release, which is expected to be December 17, 2021. The company is expected to report EPS of $1.43, up 93.24% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $2.22 billion, up 34.17% from the year-ago period.
Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $7.62 per share and revenue of $9.54 billion. These totals would mark changes of +76.8% and +32.54%, respectively, from last year.
Investors might also notice recent changes to analyst estimates for Darden Restaurants. These revisions help to show the ever-changing nature of near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.
Based on our research, we believe these estimate revisions are directly related to near-team stock moves. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.
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. Over the past month, the Zacks Consensus EPS estimate has moved 0.23% higher. Darden Restaurants is currently a Zacks Rank #3 (Hold).
Digging into valuation, Darden Restaurants currently has a Forward P/E ratio of 19.24. This valuation marks a discount compared to its industry's average Forward P/E of 23.92.
Investors should also note that DRI has a PEG ratio of 1.92 right now. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Retail - Restaurants was holding an average PEG ratio of 1.96 at yesterday's closing price.
The Retail - Restaurants industry is part of the Retail-Wholesale sector. This industry currently has a Zacks Industry Rank of 241, which puts it in the bottom 6% of all 250+ industries.
The Zacks Industry Rank gauges the strength of our individual 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.
You can find more information on all of these metrics, and much more, on Zacks.com.
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