Last week saw the newest yearly earnings release from Darden Restaurants, Inc. (NYSE:DRI), an important milestone in the company's journey to build a stronger business. Results were roughly in line with estimates, with revenues of US$11b and statutory earnings per share of US$8.51. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

After the latest results, the 23 analysts covering Darden Restaurants are now predicting revenues of US$11.8b in 2025. If met, this would reflect a reasonable 4.0% improvement in revenue compared to the last 12 months. Per-share earnings are expected to climb 10% to US$9.54. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$12.0b and earnings per share (EPS) of US$9.60 in 2025. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.

It will come as no surprise then, to learn that the consensus price target is largely unchanged at US$173. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic Darden Restaurants analyst has a price target of US$192 per share, while the most pessimistic values it at US$149. This is a very narrow spread of estimates, implying either that Darden Restaurants is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Darden Restaurants' past performance and to peers in the same industry. It's pretty clear that there is an expectation that Darden Restaurants' revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 4.0% growth on an annualised basis. This is compared to a historical growth rate of 8.4% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 9.8% per year. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Darden Restaurants.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. The consensus price target held steady at US$173, with the latest estimates not enough to have an impact on their price targets.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Darden Restaurants analysts - going out to 2027, and you can see them free on our platform here.

Plus, you should also learn about the 2 warning signs we've spotted with Darden Restaurants .

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com