The upgrade in the price target to $175 reflects an increase in sales trend estimates by BMO Capital and the application of a roll-forward methodology to fiscal year 2026. The analyst from BMO Capital recognized Darden's efforts to proactively drive sales in the second half of fiscal year 2025. Despite these initiatives, the analyst noted that Darden's performance relative to the restaurant industry continues to face challenges compared to historical standards.
This ongoing struggle in a pressurized sales environment is the reason for the firm's continued neutral stance on the stock. The company maintains a strong dividend track record, having paid dividends for 30 consecutive years, with a current yield of 3.05%. For comprehensive analysis of Darden's market position and future prospects, investors can access the detailed Pro Research Report available on InvestingPro. The company maintains a strong dividend track record, having paid dividends for 30 consecutive years, with a current yield of 3.05%.
For comprehensive analysis of Darden's market position and future prospects, investors can access the detailed Pro Research Report available on InvestingPro. The adjustment comes after Darden reported second-quarter earnings per share (EPS) for fiscal year 2025 of $2.03, a figure that narrowly surpassed the consensus estimate of $2.02.
This modest beat was attributed to stronger comparable sales and lower food costs. The company has demonstrated solid financial performance, with revenue growing nearly 6% over the last twelve months to $11.4 billion. InvestingPro subscribers can access detailed financial health metrics and over 10 additional ProTips about Darden's performance.
Darden, which now includes Chuy's in its portfolio, has confirmed its earnings guidance for fiscal year 2025. The company anticipates that comparable sales will align with the mid-point of its previous guidance range. However, it expects that comparable sales and EPS growth in the third quarter of fiscal year 2025 will not match the stronger performance projected for the fourth quarter.
The upgrade in the price target to $175 reflects an increase in sales trend estimates by BMO Capital and the application of a roll-forward methodology to fiscal year 2026. The analyst from BMO Capital recognized Darden's efforts to proactively drive sales in the second half of fiscal year 2025. Despite these initiatives, the analyst noted that Darden's performance relative to the restaurant industry continues to face challenges compared to historical standards. This ongoing struggle in a pressurized sales environment is the reason for the firm's continued neutral stance on the stock.
In other recent news, Darden Restaurants (NYSE:DRI) has been the center of attention due to its impressive earnings and revenue results. The restaurant giant's second quarter fiscal year 2025 performance exceeded expectations, with same-store sales growing by 2.4%, surpassing the Street's expectation of 1.4%.
This led the company to confidently reiterate its full-year 2025 earnings per share guidance, projected to be between $9.40 and $9.60. Several financial firms, including Stephens, Oppenheimer, KeyBanc Capital Markets, Baird, and Raymond (NS:RYMD) James, have raised their price targets for Darden while maintaining various ratings.
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