The analyst expects in-line 1Q23 sales and EPS results.
While broader recession and rate concerns have re-intensified after last week’s inflation and FedEx Corp (NYSE: FDX) headlines, demand for U.S. restaurants remains resilient, said Vaccaro.
He added that lower gas prices, still solid labor market and wage growth conditions, and the buffer of excess savings for middle/upper-income consumers seem to be supportive.
Vaccaro thinks the company’s shares trade at the lower end of the stock’s historical valuation range with an attractive dividend (nearly 4%), continuing to present an attractive entry point for investors with a less negative macro outlook.
He also is of the opinion that Darden is a high-quality, full-service restaurant company characterized by a portfolio of high AUV/margin brands, a best-in-class management team, scale, and systems, and a strong cash flow profile.
Price Action: DRI shares are trading higher by 1.55% at $131.69 on the last check Monday.
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