Jefferies Downgrades Darden Restaurants to "Hold" Following its Poor Q2 Forecast (DRI)

Jefferies Downgrades Darden Restaurants to “Hold” Following its Poor Q2 Forecast (DRI)


Following Tuesday’s poor guidance for Darden Restaurants, Inc. (DRI), analysts at Jefferies downgraded the company on Wednesday as well as lowered its valuation.

The analysts downgraded DRI from “Buy” to “Hold” with a new price target of $47, down from $61. The new price target is a a -1% difference from Tuesday’s closing price of $47.40.

Jefferies commented, “With DRI preannouncing a disappointing F2Q miss & once again lowering guidance into the qtr, we are downgrading the stock from Buy to Hold. Valuation is reasonable & we like the Yardhouse acq, but sales have stagnated despite multiple efforts to reinvigorate traffic. We cut our F13/14 EPS to $3.35/3.82, PT to $47 and rating to Hold as we await better visibility on the top line.”

Darden Restaurants shares were down 39 cents, or -0.82%, in premarket trading on Wednesday.

The Bottom Line
Shares of Darden Restaurants (DRI) have a 4.22% dividend yield, based on last night’s closing stock price of $47.40. The stock has technical support in the $44-$46 price area. If the shares can firm up, we see overhead resistance around the $50-$52 price levels.

Darden Restaurants, Inc. (DRI) is not recommended at this time, holding a DARS™ Rating of 3.4 out of 5 stars.

Be sure to visit our complete recommended list of the Best Dividend Stocks, as well as a detailed explanation of our ratings system here.

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