Darden Restaurants Stock Analysis, Valuation (NYSE:DRI)

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$96.52 $1.17 (1.2%) DRI stock closing price Feb 16, 2018 (Closing)
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Darden Restaurants
Updated on : Feb 16, 2018
previous close
DRI 96.5 (0%)
S&P 500 2732.2 (0%)
Closing Price On: Feb 16, 2018
stock rating
RATING: ★★★★★★★★★★ (0/5)
Industry :
Retail-Food and Restaurants
Sector :
Retail-Wholesale
5 Quarter Revenue
Revenue Growth
2018-Q2
$billion
%
YOY GROWTH
Compared to the industry
Long Term Growth
5 Year CAGR:
-1.5%
Operating Profit
Operating Margin:
9.2%
Sector Average:
5.8%
5 Quarter Net Profit
Net Margins
2018-Q2
%
LTM Margin
Compared to the industry
Cash Flow
Operating cash flow:
$134.7M
Net Income:
$84.7M
Dividend Yield
DRI dividend yield:
2.47%
PROS      CONS
Operating Margins
Net Margins
Cash Flow
ROIC
ROE
Long Term Growth
PS Valuation
Rating: ★★★★★★★★★★ (0/5)
Relative Valuation
DRI PS :
1.6
Industry PS :
0.8
Sector:   Retail-Wholesale.   *PE adjusted for one time items.
Other Metrics
Return on Invested Capital:
17.6%
Return on Equity:
24.7%
Free Cash Flow Margin:
1.5%
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Darden Restaurants Stock Analysis

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Investors can watch the Amigobulls Darden Restaurants stock analysis video here. This video puts forward our latest analysis highlighting the pros and cons for DRI stock.

Note: Amigobulls stock rating is our opinion based on the historical performance of the company's fundamentals. It is not indicative of the future performance of the stock.

Darden Restaurants, Inc. Stock Rating 3/5

We at Amigobulls use various financial measures including profit margins, revenue growth and dividends for DRI stock analysis. We compare Darden Restaurants valuation with its sector peers to gauge relative attractiveness of DRI stock. Based on a company's historical fundamentals we arrive at Darden Restaurants stock rating which is indicative of the company's financial performance.

Should you buy DRI stock?

  • Darden Restaurants's average operating margin of 9.2% was exceptional.
  • LTM Net margins were good at 6.5% for Darden Restaurants.
  • The company has an operating cash flow which is 1.6 times the net income. We see this as a positive signal.
  • Darden Restaurants generates a high return on invested capital of 17.6%.
  • The LTM ROE of 24.7% for Darden Restaurants is attractive.

Should you sell DRI stock?

  • Sales declined by -1.5% annually over the last 5 years.
  • The DRI stock currently trades at a PE of 22.9, which is expensive, compared to the industry average of 21.
  • The company is trading at a price to sales multiple of 1.6, which is higher in comparison to the Retail-Food and Restaurants industry average of 0.8, making DRI stock expensive.

Comments on this video and Darden Restaurants stock

Investors can use Amigobulls Darden Restaurants stock analysis as a tool to arrive at accurate conclusions regarding financial health of the company and its valuation. The fundamentals of a company are vital to identify long-term investment opportunities.

Darden Restaurants revenue growth and profit or net income are the main underlying forces which could detremine the direction of the share price. Along with fundamentals, investors can utilize technical analysis to get a better idea about the price trend of Darden Restaurants stock.