Darden Restaurants (DRI) are winning but falling behind in the market: what you need to know


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This story originally appeared on Zack

Darden Restaurants (DRI) closed at $ 148.12 in the last trading session, marking a movement of +1.01% from the previous day. This change was smaller than the S&P 500’s 2.07% gain on the day. Meanwhile, the Dow Jones gained 1.4% and the Nasdaq, an index with a strong technology component, added 0.49%.

Prior to today’s trading, shares of owner Olive Garden and other restaurant chains had lost 4.39% in the past month. This was narrower than the 4.8% loss of the retail and wholesale sector and was smaller than the 2.08% loss of the S&P 500 during that time period.

Darden restaurants will look to show strength as their next earnings release nears, which is expected on December 17, 2021. The company is expected to post EPS of $ 1.43, up 93.24% from in the quarter of the previous year. Meanwhile, Zacks’ consensus estimate for revenue projects net sales of $ 2.22 billion, up 34.17% from the previous year.

For the full year, our Zacks consensus estimates suggest analysts expect 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 a year ago.

Investors might also notice recent changes to analyst estimates for Darden restaurants. These revisions help show the ever-changing nature of short-term business trends. With this in mind, we can take positive estimate revisions as a sign of optimism about the company’s business prospects.

Based on our research, we believe that these estimate revisions are directly related to stock movements close to the team. We have developed the Zacks Rank to capitalize on this phenomenon. Our system takes these rating changes into account and provides a clear and actionable scoring model.

The Zacks Rank system, which ranges from # 1 (strong buy) to # 5 (strong sell), has an impressive history of externally audited outperformance, with # 1 stocks generating an average annual return of + 25% since 1988. Over last month, the Zacks Consensus EPS estimate rose 0.23%. Darden restaurants are currently ranked at Zacks Rank 3 (pending).

Digging into the valuation, Darden restaurants currently have a forward P / E ratio of 19.24. This valuation marks a discount compared to the average forward P / E of its sector of 23.92.

Investors should also note that the DRI currently has a PEG ratio of 1.92. The PEG ratio is similar to the widely used P / E ratio, but this metric also takes into account the expected profit growth rate of the company. Retail – Restaurants held an average PEG ratio of 1.96 at yesterday’s closing price.

The Retail Trade – Restaurants industry is part of the Retail Trade-Wholesale sector. This industry currently has a Zacks Industry Rank of 241, which places it in the bottom 6% of all 250+ industries.

The Zacks Industry Rankings assesses the strength of our individual industry groups by measuring the average Zacks rank of individual stocks within groups. Our research shows that the top 50% of industries top the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and more, at Zacks.com.

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