Darden Restaurants' Portfolio Is Better Positioned Than Most, Says This Analyst

• KeyBanc analyst Eric Gonzalez reiterated an Overweight rating on the shares of Darden Restaurants Inc (NYSE: DRI) and raised the price target to $150 from $136.

• The analyst believes the company's portfolio is better positioned than most, having preserved affordability and leaned heavily into productivity over the last two years.

• Gonzalez added that Darden's scale, data insights, strategic planning, and results-oriented culture should enable it to outperform through various economic cycles.

• Also Read: Darden Restaurants Reports Q1 Revenue Below Street View; Backs FY23 Outlook

• The return of Darden's Never-Ending Pasta Bowl (NEPB) at Olive Garden is intended to be a natural progression of the company's messaging, which initially highlighted the Never-Ending first course and, more recently, its sauces.

• NEPB, Gonzalez says, is the evolution of this campaign and is being executed during the seasonally low-volume period allowing the brand to keep its restaurants fully staffed as it approaches the higher-volume holiday periods.

• He cited that the pandemic allowed Olive Garden to shed less profitable guests and reinvest in its food/service to create a more sustainable competitive advantage.

• By underpricing the inflation curve as costs surged, Olive Garden should be less likely to revert to pre-pandemic habits even as its peers increasingly look to do so, noted the analyst.

• Also See: This Type Of Restaurant Is Thriving Right Now, Yet Olive Garden Struggles: Here's Why

• Price Action: DRI shares are trading lower by 2.19% at $130.19 on the last check Thursday.

• Photo Via Company

Latest Ratings for DRI

Date	Firm	Action	From	To
Dec 2021	Stifel	Upgrades	Hold	Buy
Dec 2021	Stephens & Co.	Maintains		Overweight
Dec 2021	MKM Partners	Maintains		Buy

View More Analyst Ratings for DRI

View the Latest Analyst Ratings

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