KeyBanc Maintains 'Buy' Rating on Darden Restaurants (DRI), Despite Disappointing Q1 Results
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KeyBanc maintains 'Buy' rating on Darden Restaurants (NYSE: DRI), despite disappointing Q1 results. Price target lowered to $38.00 from $45.
KeyBanc analyst says, "...We view Darden as a best-in-class operator. We continue to believe that DRI will outperform most of its casual dining competitors given the strong positioning of its core brands, the Company's marketing expertise, easier year-over-year SSS comparisons (beginning in 2Q09) and economies of scale with respect to purchasing. We also project that DRI will generate strong cash flow that will allow the Company to actively repurchase shares. As shares are trading at just 9.3x our revised CY09 EPS estimate of $3.03, we believe that yesterday's pullback in the stock represents an attractive entry point for long-term investors."
Darden Restaurants, Inc. (Darden) operates in the full-service dining segment of the restaurant industry, primarily in the United States. In the United States, it operated 1,667 restaurants in 49 states (the exception being Alaska), including 651 Red Lobster, 647 Olive Garden, 305 LongHorn Steakhouse, 32 The Capital Grille, 23 Bahama Breeze and seven Seasons 52 restaurants, and two specialty restaurants: Hemenway’s Seafood Grille & Oyster Bar and The Old Grist Mill Tavern.
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