Yahoo Finance Here's What Analysts Are Forecasting For Darden Restaurants, Inc. (NYSE:DRI) After Its Annual Results
Investors in Darden Restaurants, Inc. (NYSE:DRI) had a good week, as its shares rose 3.0% to close at US$153 following the release of its yearly results. Darden Restaurants reported in line with analyst predictions, delivering revenues of US$11b and statutory earnings per share of US$8.51, suggesting the business is executing well and in line with its plan. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
See our latest analysis for Darden Restaurants
Taking into account the latest results, the current consensus from Darden Restaurants' 23 analysts is for revenues of US$11.8b in 2025. This would reflect a modest 4.0% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to grow 11% to US$9.58. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$12.0b and earnings per share (EPS) of US$9.60 in 2025. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.
It will come as no surprise then, to learn that the consensus price target is largely unchanged at US$173. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. Currently, the most bullish analyst values Darden Restaurants at US$192 per share, while the most bearish prices it at US$149. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.
Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. It's pretty clear that there is an expectation that Darden Restaurants' revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 4.0% growth on an annualised basis. This is compared to a historical growth rate of 8.4% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 9.8% per year. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Darden Restaurants.
The Bottom Line
The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Darden Restaurants' revenue is expected to perform worse than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have forecasts for Darden Restaurants going out to 2027, and you can see them free on our platform here.
Even so, be aware that Darden Restaurants is showing 2 warning signs in our investment analysis , you should know about...
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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