Is Darden Restaurants Stock Underperforming the S&P 500?

Darden Restaurants, Inc. (DRI), headquartered in Orlando, Florida, stands as a prominent operator of multi-brand casual and upscale dining establishments throughout North America. The company oversees well-known chains such as Olive Garden, LongHorn Steakhouse, and The Capital Grille, delivering diverse Italian, steakhouse, and fine-dining options to millions of patrons each year. The company has a market capitalization of $20.83 billion, which classifies it as a “large-cap” stock. 

Darden’s stock had reached a 52-week high of $228.27 in June, but is down 19.7% from that level. The company has faced pressure from elevated beef costs and a missed bottom-line estimate. Over the past three months, the stock has dropped 14.1%. On the other hand, the broader S&P 500 Index ($SPX) has gained 4.8% over the same period. 

Over a more extended period, this underperformance persists. Over the past 52 weeks, the stock has gained 9.2%, while over the past six months it has declined 15.8%. Contrarily, the S&P 500 index has gained 13.4% and 14.6% over the same periods, respectively. Darden’s stock has traded below its 200-day moving average since mid-September and is currently near its 50-day moving average. 

On Sept. 18, Darden reported its first-quarter results for fiscal 2026 (the quarter that ended on Aug. 24). The company’s sales increased 10.4% year-over-year (YOY) to $3.04 billion, meeting Street forecasts. Darden’s same-restaurant sales increased 4.7%, led by a 5.9% increase in Olive Garden same-restaurant sales. Its sales growth was also supported by the acquisition of 103 Chuy’s Tex-Mex restaurants, as well as 22 net new restaurants. 

The company’s adjusted EPS was $1.97 for the quarter, up 12.6% from the prior year’s period, missing the $2 Wall Street analysts’ estimate. The stock dropped 7.7% intraday on Sept. 18. For fiscal 2026, the company expects its adjusted EPS to be in the range of $10.50 to $10.70. 

We compare Darden Restaurants’ performance with that of another restaurant operator, Yum! Brands, Inc. (YUM), which has gained 6.9% over the past 52 weeks and 3.3% over the past six months. Therefore, Darden has outperformed Yum! Brands over the past 52 weeks but has underperformed over the past six months.

Wall Street analysts are moderately bullish on Darden’s stock. The stock has a consensus rating of “Moderate Buy” from the 30 analysts covering it. The mean price target of $221.55 indicates a 20.9% upside compared to current levels. The Street-high price target of $261 indicates a 42.4% upside.