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What this page is: Delvantic's full research page for Darden Restaurants, Inc. (DRI) — AI-driven forensic equity research: mechanical valuation models (DCF, EPV, anchored-PE, scenario) plus three independent AI lenses (Quality / Value / Sentiment). Everything below is rendered server-side; you are not missing content that requires JavaScript. All scores are predictions and research opinions, not financial advice.
Our current read (analysis of 2026-09-22): Designation Watch · Gem Score -3 (−100…+100 Quality+Value blend) · Quality 55 · Value -42 · Sentiment 9 (timing only, not weighted) · Composite fair value $197.11 vs $215.56 at analysis
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Darden Restaurants, Inc.
DRI NYSEDarden Restaurants, Inc. is a full-service restaurant company that owns and operates a portfolio of well-known dining brands across the United States and Canada. Its restaurant family includes Olive Garden, LongHorn Steakhouse, Cheddar’s Scratch Kitchen, Yard House, Ruth’s Chris Steak House, The Capital Grille, Chuy’s, Seasons 52, Eddie V’s, and Bahama Breeze, serving a broad mix of casual, polished casual, and fine-dining occasions. The company focuses on dine-in service, takeout, beverages, bar offerings, catering, and gift cards, supported by a multi-brand operating model designed to serve different customer preferences and dining experiences. Darden Restaurants plays an important role in the North American full-service dining market by combining scale, brand recognition, and operational consistency across a diverse restaurant portfolio. Headquartered in Orlando, Florida, Darden Restaurants remains one of the largest operators in the full-service restaurant sector.
Price Overview
Price History (1 Year)
Revenue & Net Income Trend
| Period | Revenue | Net Income | Net Margin | YoY/QoQ |
|---|
Key Metrics
EPS (Diluted): 10.38
Total Equity: $2.21B
Shares: 116,300,000
Total Debt: $1.64B
Cash: $219.50M
EBITDA: $2.14B
Total Debt: $1.64B
Cash: $219.50M
Revenue: $13.21B
Revenue: $13.21B
Revenue: $13.21B
Total Equity: $2.21B
Tax Rate: 12.6%
Equity: $2.21B
Total Debt: $1.64B
Cash: $219.50M
Current Liabilities: $3.01B
Long-Term Debt: $944.10M
Total Debt: $1.64B
Total Equity: $2.21B
Shares: 116,300,000
Shares: 116,300,000
CapEx: -$734.00M
Shares: 116,300,000
Stock Price: $215.56
Net Income: $1.21B
Industry Benchmarks
Income Statement (Annual)
Last updated: Sep 2, 2026 6:14am (19d ago)| Metric | 2022 | 2023 | 2024 | 2025 | 2026 |
|---|---|---|---|---|---|
| Revenue | $9.6B | $10.5B | $11.4B | $12.1B | $13.2B |
| Cost of Revenue | $7.7B | $8.5B | $9.1B | $9.6B | $10.5B |
| Gross Profit | $1.9B | $2.0B | $2.3B | $2.5B | $2.7B |
| Operating Expenses | $739.6M | $763.3M | $951.5M | $1.1B | $1.1B |
| Operating Income | $1.2B | $1.2B | $1.3B | $1.4B | $1.6B |
| Net Income | $952.8M | $981.9M | $1.0B | $1.0B | $1.2B |
| EBITDA | $1.5B | $1.6B | $1.8B | $1.9B | $2.1B |
| EPS | $7.46 | $8.06 | $8.57 | $8.93 | $10.45 |
| EPS (Diluted) | $7.39 | $7.99 | $8.51 | $8.86 | $10.38 |
Balance Sheet (Annual)
Last updated: Sep 2, 2026 6:00am (19d ago)| Metric | 2022 | 2023 | 2024 | 2025 | 2026 |
|---|---|---|---|---|---|
| Cash & Equivalents | $420.6M | $367.8M | $194.8M | $240.0M | $219.5M |
| Total Current Assets | $1.2B | $997.7M | $822.8M | $937.7M | $942.9M |
| Total Assets | $10.1B | $10.2B | $11.3B | $12.6B | $12.9B |
| Current Liabilities | $1.8B | $1.9B | $2.2B | $2.2B | $3.0B |
| Long-Term Debt | $1.9B | $884.9M | $1.4B | $2.1B | $944.1M |
| Total Liabilities | $7.9B | $8.0B | $9.1B | $10.3B | $10.7B |
| Total Equity | $2.2B | $2.2B | $2.2B | $2.3B | $2.2B |
| Retained Earnings | -$25.9M | -$32.5M | -$35.5M | -$16.1M | -$108.4M |
Cash Flow (Annual)
Last updated: Sep 2, 2026 6:29am (19d ago)| Metric | 2022 | 2023 | 2024 | 2025 | 2026 |
|---|---|---|---|---|---|
| Operating Cash Flow | $1.3B | $1.6B | $1.6B | $1.7B | $1.9B |
| Capital Expenditure | -$376.9M | -$564.9M | -$601.2M | -$644.6M | -$734.0M |
| Free Cash Flow | $887.7M | $987.9M | $1.0B | $1.1B | $1.1B |
| Acquisitions (net) | $0 | $0 | -$701.1M | -$613.7M | $0 |
| Net Debt Issued / (Repaid) | $0 | $0 | $500.0M | $750.0M | $0 |
| Dividends Paid | -$563.0M | -$589.8M | -$628.4M | -$658.5M | -$693.0M |
| Stock Buybacks | -$1.1B | -$458.7M | -$453.9M | -$418.2M | -$671.7M |
| Net Change in Cash | -$742.6M | -$55.9M | -$196.1M | $34.4M | -$26.9M |
Growth Trends (YoY %)
Last updated: Sep 2, 2026 6:14am (19d ago)| Metric | 2023 | 2024 | 2025 | 2026 |
|---|---|---|---|---|
| Revenue Growth | +8.9% | +8.6% | +6.0% | +9.4% |
| Gross Profit Growth | +3.3% | +15.3% | +9.1% | +8.5% |
| Operating Income Growth | +3.4% | +9.4% | +3.7% | +16.2% |
| Net Income Growth | +3.1% | +4.7% | +2.1% | +15.0% |
| EBITDA Growth | +3.9% | +11.6% | +5.9% | +14.1% |
Dividend History (Last 20)
Last updated: Aug 31, 2026 10:08am (21d ago)| Date | Dividend | Declaration | Record | Payment |
|---|---|---|---|---|
| 2026-07-10 | $1.62 | — | — | — |
| 2026-04-10 | $1.50 | — | — | — |
| 2026-01-09 | $1.50 | — | — | — |
| 2025-10-10 | $1.50 | — | — | — |
| 2025-07-10 | $1.50 | — | — | — |
| 2025-04-10 | $1.40 | — | — | — |
| 2025-01-10 | $1.40 | — | — | — |
| 2024-10-10 | $1.40 | — | — | — |
| 2024-07-10 | $1.40 | — | — | — |
| 2024-04-09 | $1.31 | — | — | — |
| 2024-01-09 | $1.31 | — | — | — |
| 2023-10-06 | $1.31 | — | — | — |
| 2023-07-07 | $1.31 | — | — | — |
| 2023-04-06 | $1.21 | — | — | — |
| 2023-01-09 | $1.21 | — | — | — |
| 2022-10-06 | $1.21 | — | — | — |
| 2022-07-07 | $1.21 | — | — | — |
| 2022-04-07 | $1.10 | — | — | — |
| 2022-01-07 | $1.10 | — | — | — |
| 2021-10-07 | $1.10 | — | — | — |
Deep Analysis
Risk : Reward — upside vs downside from this company's own quarters
Computed 2026-09-18 02:42A +1σ run of quarters pays -6%; a −1σ run costs 36%. Ratio -0.2:1 (μ 8.7%, σ 3.6% , 16 pairs).
| Case | Growth | Margin | Fair value | vs price ($215.56) |
|---|---|---|---|---|
| Bull — recovery | +13% | 10.6% | $218.22 | +1% |
| Base — stabilizes | +9% | 9.2% | $167.14 | -22% |
| Bear — keeps slipping | +4% | 7.8% | $125.39 | -42% |
| Upside — a +1σ run of quarters (v2) | +12% | 10.0% | $202.42 | -6% |
| Stress — a −1σ run of quarters (v2) | +5% | 8.5% | $137.97 | -36% |
Narrative Economics
market-narrative step).
Growth Outlook
Analyzed 2026-09-02 06:42The question every valuation on this page silently assumes: is this company likely to grow? Judged forward — the business, its category, the world — against what's already printed.
Claude Reading
Looking at the raw quarterly cadence first: revenue has climbed from $2.76B (Aug-24) to $3.72B (May-26) — that's 35% growth over seven quarters, and the most recent YoY quarter (3.72 vs 3.27) is +13.8%, meaningfully hotter than the 7.7% five-year CAGR. Net income in the trailing four quarters totals ~$1.21B, and margins have expanded from ~7.5% to 10.9% at the peak. Annual FCF at $1.12B against a $24.5B market cap is a ~4.6% yield; add the 2.84% dividend and you have a reasonable, not exciting, base return. The balance sheet is fine but not fortress-like as the narrative claims — $1.64B debt vs $219M cash, current ratio 0.31, D/E 0.74. This is a leveraged operator running working capital tight (normal for restaurants, but let's not romanticize it).
Where I diverge from the prior stack: the synthesis's "slight upside" to $221 feels like false precision on a stock trading at 20.8x earnings and 12.3x EV/EBITDA — both toward the high end of Darden's decade range for a business growing high-single-digits. The Market Forces read that management "sees near-term challenges the market underestimates" is more interesting than the synthesis gave it credit for. Look at the sequential Q4 print: rev jumped from $3.35B to $3.72B and NI from $307M to $405M — that's a huge Q4 seasonal spike, and Q1 FY26 (Aug-25) reverted to $3.04B/$258M. The YoY comps are flattered by acquisition contribution (Chuy's closed calendar 2024), so organic growth is meaningfully below the 9.4% headline. Nobody in the prior models discounted for that.
The contrarian case: DRI is being priced as if 10%+ margins and mid-teens EPS growth are the new baseline, but casual dining margin peaks historically mark cycle tops, not new plateaus. ROE of 54.7% and ROIC of 38% are fantastic but reflect a levered, mature capital base — they're not reinvestable at those rates (capex is $734M against $1.85B OCF, and unit growth is a few percent). The insider tape shows exercise-and-dump patterns and multiple sales with zero open-market buying — "neutral" is generous; there is no insider conviction here at $215. Macro headwinds (the model flagged this) matter more than sector-leader status when the consumer wallet compresses: Olive Garden's core demo is exactly the cohort feeling squeezed. If same-store sales decelerate to +1-2% and margins mean-revert 100bps, FY27 EPS is closer to $9.50 than the ~$10.30 implied run-rate, and a fair multiple of 18x puts the stock at $170, not $220.
Net: I think the synthesis's $221 fair value is anchored too heavily on trailing execution and understates cycle risk plus the Chuy's optical boost. That said, this is a genuinely well-run company with durable FCF, and I don't see a shorting case — the bear scenario is dead money, not a crater. Fair value in a normalized scenario is $185-200; the current $215.56 is a modest premium, not egregious. I disagree with "slight upside" and lean fairly-valued-to-slightly-rich. Wait for a same-store sales miss or a broader consumer scare to buy in the $180s where the FCF yield and dividend get more compelling. The narrative layer is correct that there's no story premium to unwind — which cuts both ways: no crash catalyst, but no re-rating catalyst either.
GPT Reading
Darden looks like a very good business priced like a very good business. The raw numbers are hard to dislike: revenue has grown from $9.63B in FY2022 to $13.21B in FY2026, a 37% increase in four years, while net income moved from $953M to $1.21B. More importantly, that growth has not come with margin collapse. FY2026 operating margin was 11.98% and net margin 9.13%, both better than FY2025 and comfortably above most casual dining operators. The quarterly progression also shows healthy scale benefits: the latest quarter delivered $3.72B of revenue and $404.9M of net income, up from $3.27B and $303.9M in the year-ago period, with net margin expanding from 9.3% to 10.9%. That is not the profile of a business merely treading water on price increases; it suggests a portfolio with real operating discipline and at least some traffic resilience.
What stands out to me is that the market’s “steady compounder” framing is basically right, but the balance between quality and growth is being interpreted a bit too generously at $215.56. At roughly 20.8x trailing earnings and 12.3x EV/EBITDA, Darden is being valued more like a premium staple than a cyclical restaurant company. Yet the underlying growth is good, not exceptional. FY2026 revenue grew 9.4%, but against that sits capex of $734M to produce $1.12B of free cash flow, so this is not a capital-light software-style compounder; it is a physically intensive operator that has to keep reinvesting. FCF is solid, but the FCF yield on the current market cap is only about 4.6%. For a business with mid-single-digit to high-single-digit likely normalized growth, some labor and food cost sensitivity, and exposure to discretionary spending, that yield does not scream undervaluation. The high ROE of 54.7% flatters the picture because equity is only $2.21B against a $24.48B market cap; ROIC at 38.2% is excellent, but the P/B above 11x is the market already paying up for that excellence.
I also think some of the bullish shorthand misses a contradiction in the financial structure. This is not a “fortress” balance sheet in the usual sense. Debt of $1.64B is manageable relative to EBITDA and cash generation, but cash on hand is only $219.5M and the current ratio is just 0.31. That is fine for a stable operator with fast inventory turns and dependable vendor terms, but it does mean investors are relying on continuous cash generation rather than true balance-sheet optionality. In a benign environment that is acceptable; in a consumer slowdown it matters. The business can clearly support its 2.8% dividend and 57% payout ratio, but at today’s multiple the stock offers limited room for disappointment. My read is that this is a high-quality mature operator, but the stock is roughly fully valued to slightly rich unless you underwrite several more years of unusually clean same-store sales, cost control, and unit growth.
The best argument against my caution is straightforward: Darden keeps compounding through conditions that were supposed to trip it up. From FY2024 to FY2026, revenue rose from $11.39B to $13.21B and net income from $1.03B to $1.21B, while annual operating income advanced from $1.31B to $1.58B. Recent quarterly margins are improving, not compressing. If the company is gaining share as weaker casual dining competitors retrench, then a 20-21x earnings multiple may be entirely justified for a category winner with diversified brands and unusually dependable execution. On that view, the low current ratio is just restaurant-model plumbing, insider sales are mostly routine award/exercise activity, and the valuation should be benchmarked against consistency rather than cyclicality. I take that seriously; it is why I am not bearish on the business. I just weigh the current price against what the next leg of growth can plausibly be, and I do not see enough asymmetry.
What would change my mind is either a cheaper entry or evidence that Darden is earning a structurally higher growth/margin profile than the current multiple assumes. If the stock fell into the $185-$195 range, the FCF yield would move closer to 5.7%-6.1% and the earnings multiple into the high teens, which would look attractive for this caliber of operator. Alternatively, I would get more constructive at current levels if the next few quarters show revenue sustaining near or above 8-10% with net margin holding around 10% and FY2027 free cash flow stepping materially above $1.2B despite continued investment. Conversely, if revenue growth slips back toward 3-5% or margins retreat below FY2025 levels, the premium multiple will look unjustified very quickly.
Grok Reading
Darden’s numbers read like a textbook mature compounder that is still finding incremental gear. Annual revenue climbed from $9.63B in fiscal 2022 to $13.21B in fiscal 2026—a 7.7% CAGR—while net income moved from $953M to $1.21B (8.4% CAGR). The latest year is the tell: revenue up 9.4% year-over-year and earnings up 15%, with the May 2026 quarter posting $3.72B revenue and a 10.9% net margin, the strongest print in the eight-quarter stack. Operating cash flow of $1.85B and free cash flow of $1.12B against only $734M of capex confirm that unit economics and brand mix (Olive Garden, LongHorn, Ruth’s Chris and the rest) are converting top-line growth into real cash, not just accounting profit. ROIC at 38% and ROE at 55% are elite for full-service dining; the market is not inventing quality here. At $215.56 the stock trades 20.8× trailing earnings, 1.9× sales, and roughly 12.3× EV/EBITDA—multiples that embed mid-single-digit growth plus a 2.8% dividend, not a growth fantasy. The composite fair-value work near $222 implies only a few percent of slack, which matches what the cash-flow engine actually delivers.
What stands out against the “steady but boring” label is the recent acceleration and margin trajectory. Net margins have swung from the mid-7% range in softer quarters to nearly 11% at the peak of the latest year, and quarterly revenue is stepping higher ($2.76B → $3.72B across the span). That pattern is inconsistent with a business whose pricing power is already exhausted. Debt of $1.64B against $2.21B of equity (D/E 0.74) is manageable when FCF covers the entire debt stack in under 18 months; the thin cash balance ($220M) and sub-0.4 current ratio are structural restaurant-industry features (payables, gift cards, deferred revenue), not distress signals. Insider activity is mostly option exercise, awards, and routine selling—noise, not a coordinated exit. The story the tape is telling is execution premium without narrative froth, and the price is sitting almost exactly on that fundamental anchor.
The strongest case against a constructive stance is that 20.8× is full for a casual-dining consolidator whose long-run growth ceiling is still mid-single digits once the current acceleration fades. FCF CAGR of only 4.7% lags earnings growth, hinting that working-capital or reinvestment needs could keep free-cash conversion from matching the income-statement optimism. A smart opponent would also flag the macro headwinds layer, labor and commodity cost stickiness, and the risk that same-store sales re-decelerate to 2–3% once menu pricing runs out of room—exactly the late-cycle concern the market-forces note raises. On that reading, $215 already capitalizes the good news, the 57% payout leaves limited dividend upside, and any earnings miss would compress the multiple toward the mid-teens where restaurant peers have historically bottomed. I weigh that less heavily because the latest four quarters show revenue confidence rising, not rolling over, and because 38% ROIC gives management a wide buffer to absorb cost inflation without destroying returns. Still, the margin of safety at current levels is thin; this is not a deep-value setup.
I would flip more decisively bullish if the next two quarters hold revenue growth above 8% with net margins sustaining near 10%, or if FCF pushes through $1.3B while net debt stays flat—evidence the acceleration is structural. I would turn outright cautious on a print that shows sequential revenue deceleration below 4% YoY combined with margin compression back under 8%, or on a material step-up in leverage without corresponding FCF growth.
Big-3 Panel — where each AI stands
Advanced Analysis Forensic deep-dive · separate lenses
Revenue has compounded from $9.63B (2022) to $13.21B (2026), roughly 8% CAGR, with operating margin holding a tight 11.3-12.1% band and gross margin nudging up from 19.7% to 20.3%. Net income grew from $953M to $1.21B and FCF from $888M to $1.12B, with OCF/NI at 1.53x and accruals at -4.8% of assets — cash conversion is real, not manufactured. Beneish M of -2.39 and mechanical checks flag no earnings-quality issues. Diluted share count fell from 129.0M to 116.3M (-2.6% CAGR); buybacks are 866% of SBC and SBC is only 0.6% of revenue, so per-share value is being concentrated cleanly. The soft spots are structural, not operational: net debt of $1.42B against just $219.5M liquid cash, short-term debt of $694M exceeding cash, and an Altman Z of 2.61 in the grey zone. For a mature, high-turnover restaurant operator with $1.12B annual FCF, this leverage is manageable and typical of the model, but it means the balance sheet is a constraint, not a buffer. Insider tape is neutral-to-mildly-negative: 12 sells / 0 buys over 12 months, all appear to be routine post-vest/option-exercise dispositions by multiple officers — no red-flag concentration, no open-market conviction buys either.
Verify before trusting this (5)
- Debt maturity schedule and whether the $694M short-term debt is a revolver rollover or a real refinancing event
- Lease-adjusted leverage (operating lease liabilities) given restaurant industry structure
- Same-restaurant sales trends by brand (Olive Garden, LongHorn, Ruth's Chris) to test whether growth is organic vs unit-driven
- Whether the July 2026 insider sales cluster is tied to a scheduled vesting/10b5-1 window
- Capex composition — maintenance vs new-unit — to gauge true owner earnings vs reported FCF
The e2e composite fair value of $222.44 and signal-adjusted $221.66 sit roughly 3% above the $215.56 price - inside the noise band of any DCF. The DCF itself pegs value at $215.37, literally at spot, while the EPV floor of $121.89 warns that stripping out growth leaves a business worth ~43% less than today's quote. The anchored P/E of $337 is the outlier and should be discounted heavily - it implies a 56% upside that neither the DCF nor peer/industry economics support, likely a runaway multiple assumption on a mature full-service operator. Earnings quality is high, so no haircut is warranted, but that only validates the deserved value, it does not create a discount. What is priced in: continued mid-single-digit revenue growth, stable ~10-11% operating margins, steady buybacks, and no macro shock to full-service dining. That is roughly the base case a strong-but-mature compounder deserves - meaning the market already understands this story. To justify materially higher prices, one needs either margin expansion beyond history or an acquisition that re-rates the multiple; both are heroic. The bear case (secular pressure on full-service, labor/commodity inflation, $1.4B net debt) is not extreme but caps upside. Net: a good business at a full price.
Verify before trusting this (4)
- Forward same-restaurant sales guidance and traffic vs pricing mix
- Labor and commodity cost outlook in next transcript
- Capital allocation split between buybacks, dividend, and any M&A signal
- Any refinancing plans for the debt stack given rate environment
The macro tape is essentially neutral (regime score -3, VIX 16.3, S&P just 2.2% off highs) and DRI's 0.59 beta means whatever risk-off twitches do occur barely register here. Rates at 4.75% and a 25.8 market PE are a mild headwind for all equities, but a defensive full-service restaurant operator with a fortress balance sheet is exactly the profile that shrugs this off. There is no narrative fever to unwind and no narrative collapse to fear - the story is 'steady compounder,' intensity minimal, durability durable, cult low. That is the sentiment equivalent of white noise.
Verify before trusting this (4)
- Whether the CAKE-led casual dining sentiment rotation broadens to DRI on next print
- Analyst target revisions post next earnings - direction of consensus drift
- Any crack in the 'fortress balance sheet' framing as leverage ticks up
- VIX behavior if it breaks above 20 - would pressure discretionary tape more than DRI directly
The world is doing two things to Darden at once. Macro headwinds and a 4.75% 10-year squeeze the frequency of the mid-check dining occasion, and the restaurant category is entering a slowdown after a strong three-year run — that caps comp upside. But trade-down flows toward value-anchored full service, where Olive Garden's price architecture is the destination, not the victim. Structurally, the delivery/ghost-kitchen threat the bear cites has proven additive for scaled full-service brands that own the guest experience and negotiate delivery economics rather than renting demand. The binding constraint is input costs: the cattle cycle is a multi-year, exogenous margin tax on the steak brands that no amount of operating discipline fully offsets. Net: a business that keeps growing through a softer consumer, with the growth rate — not the direction — at risk.
When we made this prediction on Sep 2, 2026, DRI was $221.24. We expect it to be $225.50 by Mar 2027, and we consider it great value under $180.00. This is an early model (v0.6.0) — the direction is more reliable than the exact price. Made Sep 2, 2026.
Blue is our prediction, starting the day we made it. Grey is a slower route to the same place — the same destination, taking longer. Black is the actual price, so you can see how we are doing.
Post-Report Due Diligence NOTES
Evidence for a closer look, not a verdict — no score or designation on this page has been changed by it. Items marked material are ones where a conclusion above moves to the other side of the price.
trailing_eps
flips down 25%
adjusted_pe
flips down 25%