Raymond James Raises Darden Restaurants (DRI) Estimates Ahead of Earnings Seeing "Significant Upside" to Guidance

Raymond James analyst Brian Vaccaro reiterated an Outperform rating and $160.00 price target on Darden Restaurants (NYSE: DRI) but raised sales/EPS estimates ahead of the company’s F4Q release scheduled for Thursday, 6/24 (BMO).

The analyst stated "We see significant upside to management’s F4Q guidance driven by stronger sales in each of its segments, which should drive strong margin flow-through and EBITDA upside (new RJE $405M vs. guide $345-360M). We expect FY22 guidance to embed higher food inflation (perhaps in 3-4% range), though our FY22 EPS estimate is still raised by $0.47 to $7.67 on higher sales expectations. We also believe that the company has made significant progress towards re-staffing its restaurants, with further improvement likely through the summer (expiration of enhanced unemployment benefits + seasonal bump as school year ends). We expect management to address NT food/labor cost pressures, but believe these costs are manageable, which will hopefully assuage elevated investor concerns related to these dynamics. We continue to see a path towards EPS of ~$8 in CY22, which should allow the stock to outperform from current levels."

For an analyst ratings summary and ratings history on Darden Restaurants click here. For more ratings news on Darden Restaurants click here.

Shares of Darden Restaurants closed at $133.43 yesterday.

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