DA Davidson Reiterates a 'Buy' on Darden Restaurants (DRI); Skepticism on Olive Garden Creates Buying Opportunity
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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
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DA Davidson reiterates a 'Buy' on Darden Restaurants (NYSE: DRI) price target of $60.00.
DA analyst says, "Results and guidance in line with pre-announcement. Olive Garden challenges and food inflation are offsetting strength across the rest of the portfolio. EPS amounted to $0.78, matching last year’s results excluding the negative impact from Hurricane Irene. Blended comp sales were up 2.8% despite the 2.9% decline at Olive Garden. Gross margins declined 250bp year-over-year as a result of commodity inflation and unfavorable menu mix."
"Lack of clarity on September sales trends. Management did not quantify quarter-to-date comp sales trends or provide much color on recent performance at Olive Garden. However, we interpret the statement that “there is reason to be encouraged” to mean that September trends are solid despite volatility."
"Olive Garden taking more significant measures to regain momentum...Food inflation pressures expected to subside as the year progresses." (DA lowers FY12 EPS to $3.82 from $4.00 and FY13 to $4.40 from $4.60)
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 $44.30 yesterday.
DA analyst says, "Results and guidance in line with pre-announcement. Olive Garden challenges and food inflation are offsetting strength across the rest of the portfolio. EPS amounted to $0.78, matching last year’s results excluding the negative impact from Hurricane Irene. Blended comp sales were up 2.8% despite the 2.9% decline at Olive Garden. Gross margins declined 250bp year-over-year as a result of commodity inflation and unfavorable menu mix."
"Lack of clarity on September sales trends. Management did not quantify quarter-to-date comp sales trends or provide much color on recent performance at Olive Garden. However, we interpret the statement that “there is reason to be encouraged” to mean that September trends are solid despite volatility."
"Olive Garden taking more significant measures to regain momentum...Food inflation pressures expected to subside as the year progresses." (DA lowers FY12 EPS to $3.82 from $4.00 and FY13 to $4.40 from $4.60)
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 $44.30 yesterday.
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