Darden Restaurants (DRI) Stock Forecast & Price Target

Darden Restaurants is attractive because its 2,218 company-owned restaurants in continuing operations at 1QF27, up 53 y/y, show a disciplined unit-expansion model led by Olive Garden, LongHorn, and a broader portfolio that keeps generating whitespace for growth. The company is also taking share with +3.2% comps and 80 bps of outperformance versus Black Box, while its 28% cumulative pricing since COVID-19 remains well below inflation and peer pricing, supporting value perception and traffic. With FY27 openings of 75-80, approximately $875 million of capital spending, and moderating commodity pressure, Darden appears positioned for sustained mid-single-digit revenue growth and durable earnings expansion.

Darden Restaurants is facing a cautious outlook because its FY27 and FY28 estimates were trimmed, with Adj. EPS reduced to $11.29 and $12.35 and EBITDA lowered to $2.275 billion and $2.440 billion, signaling modest but persistent pressure on earnings power. Management and investors face meaningful downside from food and labor inflation, a tight labor market, and macro-sensitive discretionary spending, any of which could delay margin recovery and weaken sales if consumer confidence deteriorates. Although the full-service category has seen share gains, Darden still faces execution risks from unit growth, cannibalization, and integration challenges, while the recent slowdown in category growth suggests a less favorable backdrop for sustained expansion.