QualityDipStocks / Consumer Discretionary · Restaurants
Darden Restaurants DRI
Not in a dip by our rules: 3% below its 52-week high.
A quality company trading above our fair value estimate.
- Fair value est.
- $193.40−12%
- Market Value
- $216.92price +2%
- Off 52-wk high
- −3%
- Risk vs market
- Lowbeta 0.19
5 bullish · 5 bearish See why
Key levels
Every level vs today’s $220.17
- 52-wk lowlowest close, 1 year$169.21−23.1%
- Fair value est.base case$193.40−12.2%
- Market Valueavg paid since Oct 23$216.92−1.5%
- PriceFri Oct 30 close$220.17you are here
- 52-wk highhighest close, 1 year$227.68+3.4%
Fair value estimate
How the range is computed
Ten-year free-cash-flow DCF. Same 10-year free-cash-flow model as the base: discount rate 9.5% ±1 point and growth 8.0% ±2 points. Bear = 10.5% and 6.0%; bull = 8.5% and 10.0% (both fade to 3%). A model estimate from public filings, not a forecast of where the price will go.
Price sits inside the range.
What the price implies To be worth today’s price, DRI’s free cash flow would need to grow about 10% a year for five years; our estimate uses 8%.
Risk vs market
How risk vs market is measured
One year of daily returns (Oct 30 to Oct 30, 252 sessions). Beta = how much DRI moved for each 1% move in the S&P 500 (SPY); 1.0 moves with the market. Volatility is the yearly standard deviation of daily returns. Past behavior, not a forecast.
Has moved mostly independently of the market, but its own price swings are 2.2× the S&P 500’s (it moves on its own news).
- Beta vs S&P 500
- 0.19
- Volatility
- 28% vs 13% SPY
- Correlation SPY
- 0.09
- Correlation QQQ
- −0.03
Bull vs bear
Rule-based from the data on this page, strongest first. Not advice.
Top bullish points 5 of 5
ProfitabilityReturn on equity of 55% over the last 12 months, up 9 points in two years.
ProfitabilityReturn on invested capital of 31%, above the 9.5% discount rate our DCF uses.
Cash returnsShare count down 2.7% in a year: $710M of buybacks over 12 months.
GrowthDiluted EPS grew 17% to $10.38 in FY2026.
QualityPasses all four of our quality checks: cash generation, returns on capital, growth and balance sheet.
Top bearish points 5 of 5
ValuationOur DCF fair value estimate is $193.40, 12% below the price.
Balance sheetDebt rose 60% to $2.3B from FY2024 to FY2026.
ProfitabilityGross margin of 20%, below the 39% median for the 120 Consumer Discretionary companies we cover.
ValuationPrice / book of 12.2×, above the 4.9× median for the 151 Consumer Discretionary companies we cover.
Balance sheetDebt / equity of 1.3×, above the 0.9× median for the 119 Consumer Discretionary companies we cover.
Who’s talking about it
Notable investors, executives, analysts and public figures on Darden Restaurants in the last 48 hours. Headlines as published, each linked. Their words, not ours.
No notable mentions in the last 48 hours. Checked Nov 1, 9:09 PM ET.
Compare with peers
Closest in size in Restaurants
All fundamentals
P/E 21.3 · FCF yield 4.2% · ROE 55%
Valuation
- P/E
- 21.3×3-yr-end avg 20.0× · Consumer Discretionary median 20.9×
- Price / FCF
- 23.9×
- FCF yield
- 4.2%
- EV / EBITDA
- 12.9×
- Price / sales
- 1.88×
- Price / book
- 12.18×
- Market cap
- $25.2Bprice × diluted shares
- Enterprise value
- $27.6B
Growth
- Revenue, 12 months
- $13.4B
- Sales growth, 12 months
- +8.1%vs the 12 months before
- Sales growth, 3 yrs
- +8.0%/yrfrom FY2023
- Diluted EPS, 12 months
- $10.23
- EPS growth, last FY
- +17.2%
- Net income, 12 months
- $1.2B
- Net income growth
- +7%12 months vs before
Profitability
- Gross margin
- 20.3%
- Operating margin
- 11.7%
- Net margin
- 8.8%
- FCF margin
- 7.9%
- Return on equity
- 55%
- Return on invested capital
- 31%
Balance sheet
- Cash & short-term inv.
- $220M
- Total debt
- $2.6B
- Net cash
- −$2.4B
- Debt / equity
- 1.26×
- Interest coverage
- n/ainterest expense not tagged in SEC data
Cash flow & returns
- Free cash flow, 12 months
- $1.1B
- FCF growth, 12 months
- −4%
- Dividend yield
- 2.79%$702M paid
- Payout ratio
- 59%
- Buybacks, 12 months
- $710M2.8% of market cap
- Share count, 1 year
- −2.7%diluted shares vs a year ago
- Stock-based comp
- $81M
Trailing 12 months to Aug 30, 2026; balance sheet at Aug 30, 2026. From Darden Restaurants’s SEC filings. Sparklines show up to six fiscal years. n/a means we don’t hold that number, with the reason. How each is computed.
Valuation details
DCF $193.40 · MV $216.92 · FCF value $225.48
Assumes 8.0% growth for 5 years (revenue grew 8.0% a year FY23–FY26), fading to 3%; 9.5% discount rate, 3% terminal growth. FCF base $9.22 a share (trailing 12 months to Aug 30, 2026), from the 10-Q filed Oct 2, 2026. Net debt $2.4B, not deducted.
Setup & signals
No setup armed
No setup armed, so there’s no trigger or stop to track yet. Reversal signal rules only arm once a company is in a dip.
Momentum & 52-week range
RSI 62 · 5 days +3.7%
The business
FCF $1.0B · Sales +5%
- Free cash flow, 12 months$1.0B
- Free-cash-flow yield4.1%
- Free-cash-flow margin8%
- Gross margin22%
- Operating margin12%
- Return on invested capital27%
- Return on equity55%
- Sales growth (latest quarter vs year-ago quarter)+5%
- Net debt / EBITDA2.9×
Information only, not investment advice. Fair value estimates and talking points are rule-based model output from public data and can be wrong; stop levels are reference points, not orders. How every number is computed.
Get a text when DRI fires a reversal signal
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