Darden Restaurants (DRI) Stock Forecast & Price Target

Darden Restaurants recorded consolidated revenue of $12.1 billion in fiscal 2025, with significant growth momentum driven by its flagship brand, Olive Garden, which outperformed its full-service peers through improved everyday value and high service levels. The company's expansion strategy is bolstered by anticipated acceleration in unit growth to the upper end of the long-term target of 2.0-3.0% and its potential for regular acquisitions of small to mid-sized casual dining chains. Recent trends indicate a notable improvement in same-store sales for Olive Garden, which saw growth acceleration of approximately 700 basis points, reflecting strong consumer demand and positioning within the restaurant industry.

Darden Restaurants is facing challenges, as the company reports same-store sales and profitability metrics below guidance levels, primarily due to a cautious consumer environment, particularly among low-income segments. Additionally, there is an expectation for a decline in both same-store sales and earnings per share in fiscal 2025, exacerbated by anticipated operational volatility linked to economic uncertainties and increased costs, notably higher beef prices. The company's growth strategy, which involves expanding its unit count, raises concerns about potential inefficiencies, cannibalization, and difficulties in maintaining company culture as new stores are opened.