BUZZ - Broker’s Perspective: As negative factors weaken, Darden’s fundamental trend is increasingly strengthening

September 25 - ** Darden Restaurants Group (DRI.N) on Thursday maintained (link) its annual performance forecast, after its first-quarter results slightly missed market expectations due to the weak performance of its Italian casual dining chain Olive Garden.

** According to data compiled by London Stock Exchange Group (LSEG), the median target price given by 30 brokerages covering the stock is $236.

Headwinds ease; traffic improves

** JPMorgan (maintains "Neutral" rating, target price: $225) points out that Darden's sales trends improved throughout the quarter and continued into September; given the management's cautious outlook, if growth momentum at Olive Garden and LongHorn Steakhouse persists, there is further upside potential for the share price.

** Jefferies ("Hold", target price: $200) notes that despite a challenging consumer environment, improved demand trends, easing headwinds, and Olive Garden's highly attractive value offerings all support confidence in the company's outlook.

** TD Cowen ("Hold", target price: $215) indicates that Olive Garden's weakness is mainly related to temporary concerns about the World Cup and cyclospora, while LongHorn's growth momentum driven by foot traffic remains solid.

** BTIG ("Buy", target price: $235) says the company continues to capture market share by offering better value than competitors. The strong performance of its steakhouse chain and improving trends at its Italian restaurant chain will support further increases in the share price.

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