Darden Restaurants Stock In Focus Ahead of Q2 Earnings: Retail’s Cautious

Shares of Darden Restaurants Inc. ($DRI) were up 0.48% in the after-hours trading session on Wednesday ahead of the company’s second-quarter earnings, with retail sentiment staying cautious.

Wall Street expects Darden, parent of Olive Garden, to post earnings per share of $2.02 on estimated revenues of $2.87 billion, according to Stocktwits data.

Darden has missed EPS estimates twice out of the last four quarters. Its revenue missed consensus estimates in all four quarters.

Retail sentiment on Stocktwits turned ‘neutral’ compared to ‘bullish’ three months ago.

DRI sentiment meter and message volumes on Dec 19 as of 4:00 am ET

Darden has embarked on several strategic efforts in the past few months. It recently partnered with Uber to bring delivery services to Olive Garden and boost its reach.

It also recently bought tex-mex restaurant chain Chuy's for $605 million.

Earlier this week, Morgan Stanley raised its price target to $193 from $188 with an Overweight rating, The Fly.com reported. According to the firm, its Q2 earnings will likely be “somewhat mixed,”  noting it doesn’t anticipate a particularly eventful quarter.

Last week, BMO Capital analyst Andrew Strelzik lowered the firm's price target to $165 from $175 with a Market Perform rating. The firm foresees a potential risk to consensus EPS for the coming quarter as well as the company’s FY25 guidance, due to the pressure on its comps portfolio, the Fly.com reported.

Goldman Sachs also recently initiated coverage of Darden with a Neutral rating and a $183 price target. The firm, however, sees continuing pressures on its comps. It also  noted declining traffic for Olive Garden.

Darden’s restaurant portfolio also includes dining chains such as LongHorn Steakhouse, Yard House, Ruth's Chris Steak House, Cheddar's Scratch Kitchen, The Capital Grille, among clothes.

Darden stock is down 1.5% year-to-date.

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