Darden Restaurants, Inc.
Orin's own judgment of how firmly the evidence points one way — not the chance the price goes up.
Darden's stock has rebounded from roughly $199 in late September to $217.99 as of 20 Oct, pushing above both the 50-day ($211.58) and 200-day ($205.18) moving averages with a bullish MACD histogram of 2.49, but the rally outpaces a decelerating fundamental picture: Q1 FY2027 revenue grew just 5.1% YoY to $3.20B versus FY2026's full-year 9.4% pace, and EPS of $2.04 merely matched consensus.
At 21.2x P/E — a 6.8% discount to the peer median of 22.7x — valuation is fair but not compelling, especially with total debt of $6.32B against equity of $2.21B and 24 months of net insider selling totaling -$38.9M with zero open-market acquisitions. The risk/reward is balanced; hold for the dividend and FCF yield (FY2026 FCF of $1.12B) but await clearer evidence of reacceleration before adding.
What could go wrong
- Growth deceleration. Q1 FY2027 revenue growth of 5.1% YoY is roughly half the FY2026 pace of 9.4%, and blended same-restaurant sales rose only 3.1% per news coverage, suggesting the post-pandemic tailwind is fading.
- High leverage. Total debt of $6.32B against stockholders' equity of $2.21B as of FY2026 constrains financial flexibility and raises sensitivity to any consumer-spending downturn.
- Persistent insider selling. Over 24 months, insiders net sold 184,541 shares worth $38.9M with zero open-market purchases; a Group President sold 2,209 shares at $202.61 as recently as 6 Oct.
- Valuation re-rating risk. The stock's rebound to $217.99 has compressed the discount to peers; if growth continues to slow, the P/E of 21.2x could face compression toward lower-multiple peers like DPZ at 17.4x.
What would change my mind
Where this comes from: Q1 FY27 results · FY26 fundamentals · peer comparison · insider trades. Orin's read on DRI; not advice.
How has the share price moved?
Up 16.5% over twelve months, from $183.63 on 27 Oct 2025 to $213.96 at the Tue 27 Oct 2026 close. Its highest close in that time was $227.68 on 12 Aug 2026; the last close is 6.0% below it.
- Green line: the closing price each trading day.
- Grey line: the average closing price over the last 50 trading days.
- Dashed amber line: the same over the last 200 trading days — a slower, smoother line.
- Bars along the bottom: shares traded each day — green when it closed higher than the day before, rose when lower (the most, 5.5M, on 20 Mar 2026).
- Flags: the company's filings, on the day they were made (a 10-Q is the quarterly report and a 10-K the annual report; an 8-K reports a major event).
On file
All DRI filingsLargest holders · 13F Q2 2026
Money flow| Filer | Position | Of fund |
|---|---|---|
| Capital World Investors | $3.1B | 0.4% |
| BlackRock | $2.0B | 0.0% |
| Vanguard Capital Management | $1.5B | 0.0% |
| Vanguard Portfolio Management | $1.1B | 0.0% |
| State Street | $1.0B | 0.0% |
| Wellington Management Group | $800.2M | 0.1% |
| Charles Schwab Investment Management | $764.5M | 0.1% |
| Geode Capital Management | $711.4M | 0.0% |
| Bank of America | $651.8M | 0.0% |
| JPMorgan Chase | $412.8M | 0.0% |
87 of the 815 filers we track · quarter ended Q2 2026 · positions, not flows
Insiders, last 24 months: 449 Form 4 filings; open-market trades net −$38.9M. Of the 50 on hand, 0 were open-market purchases and 5 sales — the rest are grants, option exercises and tax withholding.
Ask Orin about DRI
Orin answers questions about DRI from its filings, transcripts and numbers — with the source behind every claim. Your own desk starts with 3 free days, card required.
Start 3 free days →How is it priced, against its own past and its sector?
Priced at 20.8× its last 12 months of profit (Tue 27 Oct close) — higher than in 4 of its last 5 fiscal years (middle 19.3×); the typical Consumer Cyclical company on the NYSE is at 20.4×.
| Measure | Now | Its usual | Sector |
|---|---|---|---|
| P/E | 20.8×above usual | 19.3× | 20.4× |
| P/S | 1.81×near usual | 1.75× | — |
| EV/EBITDA | 14.4×above usual | 13.6× | — |
| P/B | 11.8×above usual | 8.9× | — |
- "Its usual" is the middle of its own last 5 fiscal years.
P/E: the share price divided by one year of profit per share — roughly how many years of today's profit the price pays for. A company that loses money has no P/E.
P/S: the company's total market value divided by one year of revenue. Used when there is no profit to measure.
EV/EBITDA: the price of the whole company (its shares plus its debt, minus its cash) divided by one year of operating profit before interest, tax and write-downs.
P/B: the share price divided by the book value per share — what the company owns minus what it owes, as its accounts record it. When book value is tiny, P/B swings wildly and says little.
What do the analysts who cover it publish?
The analysts' average 12-month price target is $238 (from $212 to $255) — 11% above the Tue 27 Oct close price. That is their published opinion, not Orin's.
$238
$212 – $255 · +11% against the last close
- 16 buy or overweight
- 10 hold
- 0 underweight or sell
Price target: the share price an analyst publishes for about 12 months ahead. It is the opinion of the firm that wrote it; the average is across the firms that cover the company.
Overweight / underweight: analysts' rating words: overweight means the firm expects the stock to do better than the others it covers, underweight worse. Their words, not Orin's.
How is it priced next to the companies it is compared to?
Priced at 20.8× its last 12 months of profit; the middle P/E of the 6 companies it is compared to that made a profit is 22.2×.
| Company | Market value | P/E | EV/EBITDA | Gross margin | Net margin | ROE |
|---|---|---|---|---|---|---|
| DRIDarden Restaurants, Inc. | $24B | 20.8× | 14.4× | 33.3% | 8.8% | 56% |
| DPZDomino's Pizza, Inc. | $10B | 17.1× | 14.8× | 40.0% | 12.0% | n/m |
| NVRNVR, Inc. | $16B | 15.2× | 11.0× | 21.3% | 11.2% | 30% |
| RLRalph Lauren Corporation | $23B | 21.6× | 15.0× | 71.8% | 12.6% | 38% |
| SWSmurfit Westrock Plc | $22B | 44.8× | 8.4× | 18.0% | 1.6% | 3% |
| ULTAUlta Beauty, Inc. | $27B | 22.8× | 15.0× | 39.3% | 9.3% | 45% |
| WSMWilliams-Sonoma, Inc. | $29B | 25.3× | 15.2× | 47.2% | 14.7% | 58% |
- DPZ: return on equity is not meaningful (n/m) — book value is below zero.
- The list of companies is the data vendor's choice, so it can include a company a person would not have picked.
Market value: the share price times the number of shares — what the whole company is priced at.
P/E: the share price divided by one year of profit per share — roughly how many years of today's profit the price pays for. A company that loses money has no P/E.
EV/EBITDA: the price of the whole company (its shares plus its debt, minus its cash) divided by one year of operating profit before interest, tax and write-downs.
Gross margin: the share of each $1 of sales left after the direct cost of making what was sold.
Net margin: the share of each $1 of sales kept as profit after every cost. Below zero, the company lost money.
ROE: return on equity: one year of profit as a share of the shareholders' money in the business (its book value).
Is it priced high or low compared with its own past?
Priced at 20.8× its last 12 months of profit (Tue 27 Oct close). It has no full fiscal year on file since its history starts, so there is nothing of its own to compare with.
- Now20.8×
P/E: the share price divided by one year of profit per share — roughly how many years of today's profit the price pays for. A company that loses money has no P/E.
Fiscal year (FY): the company's own 12-month accounting year, which need not match the calendar year.
How has its sector been priced?
Consumer Cyclical companies on the NYSE were priced at a typical 20.4× their yearly profit (Tue 27 Oct close).
- Now20.4×
- Each year is the middle of that calendar year's daily sector P/E; "Now" is the Tue 27 Oct close figure, the same one in the table above.
Sector P/E: the middle P/E of the companies in the same sector on the same stock exchange, as the data vendor works it out each day.
What does a cash-flow model say a share is worth?
A standard cash-flow model puts it at $254 a share — 19% above the $214.00 price it was computed against (27 Oct).
| Model | Value a share | Against the price then |
|---|---|---|
| Standard | $254 | 19% above $214.00 |
| Levered | $240 | 12% above $214.00 |
Discounted cash flow: a model's estimate of what the company is worth today, from the cash it is forecast to make in future years. Small changes in the forecast move it a lot, and it says little about a company that loses money.
Standard / levered: two versions of the cash-flow model: the standard one counts the cash before the company pays its lenders, the levered one after.