Darden Restaurants Lifted by Wave of Analyst Optimism Ahead of Quarterly Report

Morgan Stanley raised its Darden price target to $255, citing expected LongHorn same-restaurant sales growth of 7.5% ahead of Q1 fiscal 2027 results on September 24.

Two Wall Street heavyweights have turned more bullish on Darden Restaurants, giving the restaurant operator a fresh tailwind as it prepares to unveil first-quarter results for fiscal 2027 later this month.

Morgan Stanley raised its price target on the stock from $236 to $255 while reaffirming an "Overweight" rating. The investment bank expects the company to surpass consensus estimates when it reports, projecting same-restaurant sales growth of 3.6% against a market consensus of 3.1%. On the bottom line, Morgan Stanley forecasts earnings per share of $2.06, just ahead of the $2.05 average Wall Street estimate.

Citi also lifted its target, moving from $245 to $248, while Stephens followed suit with an increase from $216 to $220. The cluster of upward revisions has reinforced a broadly positive mood among industry watchers just as the company's reporting date approaches.

LongHorn Carries the Momentum

The optimism rests largely on the performance of Darden's steakhouse brand. Morgan Stanley sees LongHorn delivering same-restaurant sales growth of 7.5%, comfortably above the 5.9% consensus figure. That strength is expected to offset a temporary soft patch at the company's flagship Olive Garden chain, where analysts anticipate a gain of 1.5% — slightly shy of the 1.8% market expectation.

For the full fiscal year 2027, Morgan Stanley models earnings per share of $11.25 on same-restaurant sales growth of 3.2%. Darden's own management has guided toward a range of $11.10 to $11.35.

Profit-Taking Tempers the Rally

In European trading, the shares climbed 4.7% to EUR 190.65, though the advance lost some steam as investors locked in quick gains following the Citi upgrade. That pullback pattern is a familiar one in the run-up to quarterly earnings, when traders bank short-term profits and wait for fresh signals on consumer spending behavior. The broader question hanging over the sector remains how resilient restaurant traffic will prove to be.

The stock now sits just 2.9% below its 52-week high. Since the start of the year, it has gained 16%, and it needs only a few more percentage points to reach the August peak of EUR 196.40. In German trading, the shares were recently quoted at EUR 183.65.

A Packed Calendar in Late September

Darden's schedule leaves little breathing room next week. The company holds its annual shareholder meeting on September 23, conducted entirely in a virtual format. One day later, on Thursday, September 24, it will publish its first-quarter results before the market opens, followed by a conference call featuring CEO Rick Cardenas and CFO Raj Vennam. Investors will be listening closely for management's commentary on the road ahead.

The company enters the reporting period with solid momentum behind it. In the fourth quarter of fiscal 2026, total revenue rose 13.7% to $3.72 billion, with same-restaurant sales up 4.6%. Across the full fiscal year 2026, revenue grew 9.4%. Buoyed by that performance, the board authorized a new $1.5 billion share buyback program and raised the regular quarterly dividend by 8%.