Darden Restaurants (DRI) Stock Forecast & Price Target

Darden Restaurants, as the largest operator in the US full-service restaurant sector, reported consolidated revenue of $12.1 billion for fiscal 2025 and operates a diverse portfolio of 11 brands, including Olive Garden and LongHorn Steakhouse. Positive financial metrics indicate Olive Garden's same-store sales (SSS) growth is outperforming peers, attributed to its strong everyday value and high service levels, which are expected to continue amidst any potential macroeconomic pressures. Additionally, Darden anticipates accelerating unit growth to the upper end of its long-term target of 2.0-3.0%, coupled with a strategy to acquire small to mid-sized casual dining chains, further enhancing its market presence and driving overall growth.

Darden Restaurants is facing challenges that contribute to a negative outlook, including being modestly below guidance on same-store sales and profitability expectations due to a cautious consumer environment, particularly among low-income segments. This situation is compounded by potential risks to margins in fiscal Q3 2025, resulting from expectations of a slight sales miss and increasing beef prices, which could further impact profitability. Lastly, the company is experiencing deceleration in same-store sales at Olive Garden, suggesting softer consumer demand and slower traffic, amidst operational challenges tied to unit growth and execution across its diverse restaurant portfolio.