Deutsche Bank Maintains a 'Hold' on Darden Restaurants (DRI); Achieving FY12 Expectations Will Be A Challenge
Tweet
Share
E-mailGet Alerts DRI Hot Sheet
Price: $225.26 +0.79%
Rating Summary:
27 Buy, 18 Hold, 1 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
Rating Summary:
27 Buy, 18 Hold, 1 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
Join SI Premium – FREE
Deutsche Bank maintains a 'Hold' on Darden Restaurants (NYSE: DRI). PT lowered to $47.
Deutsche analyst says, "In terms of F4Q10, we do not see much risk to our $1.00 EPS est. (in line w/consensus). Sales were off to a decent start in March (per mgmt.) and compares were easy in April due to the Easter shift. Food cost inflation also doesn’t really pick up until FY12...Our bigger concern is fiscal 2012. Cost inflation will pick up materially in coming quarters. DRI will need to pass along higher menu prices (targeting +2-3%), while also generating at least flattish same store guest traffic and mix to achieve consensus earnings expectations. Traffic+mix has been negative for the last 14 quarters and recent promotions raise questions about pricing power, in our view."
"We are maintaining our FY11E EPS of $3.42, but trimming FY12E to $3.77 from $3.82 on slightly lower SSS and margins. We assume 10% growth in FY12, at the low end of DRI’s long-term target of 10-15%."
For more ratings news on Darden Restaurants click here and for the rating history of Darden Restaurants click here.
Shares of Darden Restaurants closed at $46.96 yesterday.
Deutsche analyst says, "In terms of F4Q10, we do not see much risk to our $1.00 EPS est. (in line w/consensus). Sales were off to a decent start in March (per mgmt.) and compares were easy in April due to the Easter shift. Food cost inflation also doesn’t really pick up until FY12...Our bigger concern is fiscal 2012. Cost inflation will pick up materially in coming quarters. DRI will need to pass along higher menu prices (targeting +2-3%), while also generating at least flattish same store guest traffic and mix to achieve consensus earnings expectations. Traffic+mix has been negative for the last 14 quarters and recent promotions raise questions about pricing power, in our view."
"We are maintaining our FY11E EPS of $3.42, but trimming FY12E to $3.77 from $3.82 on slightly lower SSS and margins. We assume 10% growth in FY12, at the low end of DRI’s long-term target of 10-15%."
For more ratings news on Darden Restaurants click here and for the rating history of Darden Restaurants click here.
Shares of Darden Restaurants closed at $46.96 yesterday.
Serious News for Serious Traders! Try StreetInsider.com Premium Free!
You May Also Be Interested In
- Tesla plans 'flying' Roadster stunt at SpaceX Texas site as early as August
- Pro Diversity Network (IPDN) Reports Q2 Loss of $0.15
- Movano (MOVE) Misses Q2 EPS by 195c
Create E-mail Alert Related Categories
Analyst CommentsRelated Entities
Deutsche Bank, EarningsSign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!
