The Dividend Daily

On Monday, analysts at Jefferies & Co. lowered the price target and earnings estimates on Darden Restaurants, Inc. (DRI) after the company said its third quarter earnings outlook is shy of Wall Street estimates.

The analysts maintain a “Hold” rating on DRI, but lowered its price target from $47 to $44. This new valuation suggests a 5% downside to Friday’s closing price of $46.23.

A Jefferies analyst commented, “Although we believe most of the deceleration is due to the impact of tax changes/refund delays & weather, we have very little visibility on a NT operating turnaround. We lowered EPS & PT, and maintain our Hold rating as we believe the 4% dividend yield is sustainable & provides support at these levels.”

Furthermore, the firm cut Darden’s third quarter EPS estimate from $1.16 to $1.01. Moreover, for fiscal 2013 the analysts now see EPS coming in at $3.10 from the previous view of $3.35. For 2014, EPS is expected to be $3.40 from previous outlook of $3.75.

Darden shares were down 20 cents, or -0.43%, during Monday morning trading. The stock is down -6.42% over the past year.

The Bottom Line
Shares of Darden Restaurants (DRI) have a dividend yield of 4.34% based on Monday’s intraday trading price of $46.03 and the company’s annualized dividend payout of $2.00 per share.

Darden Restaurants, Inc. (DRI) is not recommended at this time, holding a Dividend.com DARS™ Rating of 3.3 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.