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Company News

BUZZ-Darden Restaurants shares gain on upgrades, despite PT cuts

** Shares of Darden Restaurants Inc up 2.5 pct early Weds after Baird, Maxim, in separate research notes, upgrade to “outperform” and “buy,” respectively

** However, in discrete notes, Canaccord Genuity, JPMorgan, Suntrust Robinson, BMO, RBC, Credit Suisse, and Barclays all cut DRI PTs

** Baird holds PT at $94, Maxim raises to $93 from $90

** Baird analyst David E Tarantino writes the restaurant operator’s recent pull-back provides an attractive entry point for investors

** Tarantino believes DRI “well-positioned to continue producing above-average performance” despite same-store sales concerns in the tepid casual dining space

** Analyst Stephen Anderson of Maxim also sees recent share drop as buying opportunity, believes core brands Olive Garden and LongHorn Steakhouse remain strong with above-peer positive comps

** On Sept 26 DRI said it expects negative effects on sales and EPS from Hurricane Irma to be about double that of Hurricane Harvey

** Of 25 analysts covering DRI, 9 rate co “buy” or stronger, 15 recommend “hold” and one “sell”; median PT $88, down about 4 pct over past 90 days

** Thomson Reuters StarMine awards Tarantino of Baird and Stephen Anderson of Maxim Group 3 and 4 stars out of five, respectively, for past DRI analysis

** Despite recent pullback, DRI shares have gained over 9.2 pct YTD, underperforming both the S&P 500 Restaurant Index (up 12.9 pct) and the broader S&P 500 (up 11.7 pct) (Stephen Culp)

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