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Exclusive News Darden Restaurants Has the Growth and Cash Flow to Hit New HighsAuthor: Thomas Hughes. Article Published: 3/20/2026. 
Key Points - Darden’s Q3 fiscal year 2026 results showed steady sales and comparable-sales growth, alongside an EPS beat on an adjusted basis.
- The company kept returning capital through dividends and buybacks, with repurchases continuing to reduce share count.
- Bahama Breeze-related charges weighed on reported results, but updated full-year guidance points to continued momentum into 2026.
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Darden Restaurants (NYSE: DRI) stock could reach a new high this year because it's growing, generating cash flow, and returning capital to investors who are accumulating shares. That thesis was reinforced in the company's Q3 fiscal year 2026 (FY2026) earnings report, which showed solid revenue growth, resilient comps, and an improved full-year outlook. The critical takeaway for 2026 is that multiple factors point to higher share prices — not just the company's quality — suggesting a new high is a reasonable baseline target. Analysts' sentiment remains bullish, and institutions continue to accumulate as Darden delivers strong cash flow, pays dividends, and repurchases shares. The capital-return story is substantial. At recent prices, the stock yields about 2.94%, and dividend growth has been aggressive. Buybacks are equally meaningful: Q3 repurchase activity reduced shares outstanding by 1.86% for the quarter and about 1.5% on average for the year. That pace is expected to continue in Q4 and into the next fiscal year. There is sufficient authorization remaining for five to six quarters at the FY2026 pace, and an additional authorization is likely. Darden's Quality Shines Through Impairments and One-Offs A $2 gold stock is said to quietly control what may be the largest gold deposit in the world - worth nearly $1 trillion. According to Jim Rickards, an announcement is expected around April 15 that could bring this historic discovery into public view. See the full details on this $2 gold stock before April 15 Darden had a constructive Q3 despite one-offs and impairments tied to Bahama Breeze. Those impairments stem from a brand review and turnaround efforts that will wind down the Bahama Breeze concept; most locations will be converted to other restaurant formats. Meanwhile, the company's core brands — Olive Garden, LongHorn Steakhouse and the Other segment — continue to perform and grow. Revenue came in at $3.35 billion, up 5.9% year-over-year and slightly ahead of expectations. Strength was most evident at LongHorn, which grew comps 7.2%, while the Other segment grew 3.9%. Systemwide, comps in ongoing business rose a stronger-than-expected 4.2%, supported by a net increase of 31 restaurants, or 1.4%. Margin results were mixed. GAAP results appeared weaker than expected but reflected one-time items related to the Bahama Breeze review and restaurant closures. On an adjusted basis, results were notably stronger and more in line with investor expectations; those comparisons should clean up as one-offs roll off. Guidance was another positive. Management raised its full-year outlook for revenue and earnings, with targets now modestly above consensus. The company expects roughly 9.5% topline growth for the year — including about 2% from the extra fiscal week — and adjusted EPS of $10.57 to $10.67, with the low end in line with consensus. 
Bullish Revisions Keep the Darden Restaurants Outlook Intact Analysts' reactions to Darden's results and guidance were cautiously optimistic and broadly aligned with the positive trend. MarketBeat did not record immediate rating changes after the release, but several commentaries emphasized growth, the Bahama Breeze write-downs, and operational headwinds such as adverse weather. The company estimated a 100-basis-point impairment related to Winter Storm Fern, a factor large enough to move the needle. The 19 analysts MarketBeat tracks rate the stock a Moderate Buy with a 68% buy-side bias. The consensus price target implies roughly 11% upside, and the revision trend is bullish, pointing toward the $260 range and fresh all-time highs. Institutional ownership provides further support. Institutions own nearly 90% of outstanding shares, and institutional buying outpaced selling roughly two-to-one on a trailing 12-month basis, with buying activity ramping in Q1 2026. That concentration creates a solid support base and makes it less likely the price will fall meaningfully below the 150-day exponential moving average (EMA); a breach that far would likely trigger a buying signal. Darden's price action slipped after the release, opening slightly below the 150-day EMA and prompting a bullish response. The market rallied from the early low, confirming support at that critical level and positioning the stock to continue advancing through the year. Resistance near $210, $220 and $227 may cause short-term volatility but are not expected to cap long-term gains. A move above $220 would clear the baseline of a head-and-shoulders pattern and open the door to a sustainable rally. |
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