January 30, 2025
Top 10 Stock Darden Restaurants Strong Buy Recommendation
How to read the ranks
For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".
Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".
Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.
Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.
(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).
(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.
Snapshot: Darden Restaurants – Top 10 Stock in S&P 500 Consumer Discretionary Index
Darden Restaurants is listed as a top 10 stock on January 30, 2025 in the market index S&P US Luxury because of its high performance in at least one of the Obermatt investment strategies. As all consolidated Obermatt Ranks exhibit excellent performance, including positive market sentiment in the professional investor community, it is a solid stock investment where the risk of paying too much for the shares is limited. Based on the Obermatt 360° View of 98 (top 98% performer), Obermatt assesses an overall strong buy recommendation for Darden Restaurants on January 30, 2025.
Snapshot: Obermatt Ranks
| Country | USA |
| Industry | Restaurants |
| Index | Dividends USA, S&P US Luxury, S&P 500 |
| Size class | X-Large |
When Obermatt identifies the Top 10 stocks in a market, it’s based on a certain investment strategy. The best performing stocks usually aren’t the ones that everyone is talking about (those are often "over-priced" and have low Value ranks).
For each investment strategy, we provide you with more detailed analysis and our recommendation. You see the ranks of the top 10 stocks ranked by that particular investment strategy (360° View, Sentiment, Value, Growth, Safety and Combined Financial Performance).
360° View: Obermatt 360° View Darden Restaurants Strong Buy
| 360 METRICS | January 30, 2025 | |||||||
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| VALUE | ||||||||
| VALUE | 51 |
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| GROWTH | ||||||||
| GROWTH | 71 |
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| SAFETY | ||||||||
| SAFETY | 94 |
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| SENTIMENT | ||||||||
| SENTIMENT | 82 |
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| 360° VIEW | ||||||||
| 360° VIEW | 98 |
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ANALYSIS: With an Obermatt 360° View of 98 (better than 98% compared with alternatives) for 2025, overall professional sentiment and financial characteristics for the stock Darden Restaurants are very positive. The 360° View is based on consolidating four consolidated indicators, with all four indicators above average for Darden Restaurants. The consolidated Value Rank has an attractive rank of 51, which means that the share price of Darden Restaurants is on the lower side compared with the typical size in indicators such as revenues, profits, and invested capital. This means the stock price is lower than for 51% of alternative stocks in the same industry. The consolidated Growth Rank has a good rank of 71, which means that the company experiences above-average growth momentum when looking at financial metrics such as revenue, profit, and invested capital growth as well as stock returns. The company is also safely financed with a Safety rank of 94. Finally, professional market sentiment is above average compared with other stock investment alternatives with a Sentiment Rank of 82. ...read more
RECOMMENDATION: With a consolidated 360° View of 98, Darden Restaurants is better positioned than 98% of all alternative stock investment opportunities based on the Obermatt Method. As all consolidated Obermatt Ranks exhibit excellent performance, such as good value (Value Rank of 51), above-average growth (Growth Rank of 71), safe financing practices (Safety Rank of 94), and a positive market sentiment in the professional investor community (Sentiment Rank of 82), it is a solid stock investment where the risk of paying too much for the shares is limited and disappointments are less likely to occur, unless information not publicly available. High-Value Ranks sometimes indicate that the company's future is challenging. If they are safely financed and have above average growth, and are still a good value, it may indicate that this will not continue. We recommend evaluating whether the future of Darden Restaurants is as difficult as the stock’s low price, despite what good growth and safe financing practice suggest. Since the professional community is optimistic, you might have less to worry about, and the stock is just not sufficiently visible, which may indicate good timing right now. ...read more
Sentiment Strategy: Professional Market Sentiment for Darden Restaurants very positive
ANALYSIS: With an Obermatt Sentiment Rank of 82 (better than 82% compared with alternatives) for 2025, overall professional sentiment and engagement for the stock Darden Restaurants is very positive. The Sentiment Rank is based on consolidating four sentiment indicators, with all four indicators above average for Darden Restaurants. Analyst Opinions are at a rank of 53 (better than 53% of alternative investments), which means that, currently, stock research analysts tend to recommend a stock investment in the company. Analyst Opinions Change is also positive with a rank of 58, which means that stock research experts are changing their opinions for the better and recommending investing in the company. They are getting more optimistic about stock investments in Darden Restaurants. The Professional Investors rank is 88, which means that currently, professional investors hold more stock in this company than in 88% of alternative investment opportunities. Pros tend to favor investing in this company. Finally, Market Pulse has a rank of 63 which means that the current professional news and professional social networks are on the positive side when discussing this company (more positive news than for 63% of competitors). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 82 (more positive than 82% compared with investment alternatives), Darden Restaurants has a reputation among professional investors that is significantly higher than that of its competitors. Since all market sentiment indicators are positive, the professional community highly recommends investment in the company. Does this mean Darden Restaurants stocks are a safe investment? Far from it. Even professionals make mistakes. Especially in stock investing, there is a tendency to follow the leaders. Since trees don't grow to the heavens, such positive sentiment may also be interpreted as a danger sign. A lot of optimism can often be a sign of troubles to come, albeit unforeseen by most. ...read more
Value Strategy: Darden Restaurants Stock Price Value better than average
ANALYSIS: With an Obermatt Value Rank of 51 (better than 51% compared with alternatives), Darden Restaurants shares are more attractively priced than the majority of comparable stocks. The Value Rank is based on consolidating four value indicators, with half of the indicators below and half above average for Darden Restaurants. Price-to-Profit (also referred to as price-earnings, P/E) is 55 which means that the stock price compared with what market professionals expect for future profits is lower than for 55% of comparable companies, indicating a good value concerning Darden Restaurants's profit levels. The same is valid for Price-to-Book Capital (also referred to as market-to-book ratio) with a Price-to-Book Rank of 18, which means that the stock price is lower as regards to invested capital than for 18% of comparable investments. On the other hand, Price-to-Sales is less favorable than 69% of alternatives (only 31% of peers have an even less favorable ratio). The same is valid for dividend yield, which is lower than 20% of comparable companies, making the stock more expensive as regards to the company's expected dividend payouts. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 51, is a buy recommendation based on Darden Restaurants's stock price compared with the company's operational size and dividend yields. This is a puzzling picture, because it means that profits are high while dividends are low. Since the stock price is low compared with invested capital but high in respect to expected revenues, it means that the company has more invested capital than peers for generating the same amount of revenue. Since profits are higher, it could be a "cash cow" situation (using the classic Boston Consulting BCG matrix naming convention) where the company is on a downward trend, still living from the profits of past products. As the company pays low dividends, it may harbor the opinion that a turnaround is possible, and it rather invests the cash than pay it out to shareholders, thus sealing the company's fate early. Any investment optimism should only be a buy trigger once thorough research is completed. ...read more
Growth Strategy: Darden Restaurants Growth Momentum good
ANALYSIS: With an Obermatt Growth Rank of 71 (better than 71% compared with alternatives), Darden Restaurants shows an above-average growth dynamic in its industry. Investors also speak of positive momentum. The Growth Rank is based on consolidating four value indicators, with all but one indicator above average for Darden Restaurants. Sales Growth has a rank of 65 which means that currently, professionals expect the company to grow more than 65% of its competitors. Both Profit Growth, with a rank of 54, and Stock Returns, with a rank of 79, are also above average. But Capital Growth only has a rank of 37, which means that, currently, professionals expect the company to grow its invested capital less than 63% of its competitors. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 71, is a buy recommendation for growth and momentum investors. That may be a good sign if the company is already well positioned and doesn't require more investments at this time. They may focus on growing the top (revenues) and bottom (profits) lines, recently rewarded with above-average stock returns for shareholders. But it may also be a sign of danger as the company is falling back with capital investment activities concerning competition. This requires further analysis of corporate communications. ...read more
Safety Strategy: Darden Restaurants Debt Financing Safety very solid
| SAFETY METRICS | January 30, 2025 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 70 |
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| REFINANCING | ||||||||
| REFINANCING | 41 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 98 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 94 |
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ANALYSIS: With an Obermatt Safety Rank of 94 (better than 94% compared with alternatives) for 2025, the company Darden Restaurants has safe financing practices, which means that their overall debt burden is low. This doesn't mean that the business of Darden Restaurants is safe, it only means that the company is on the safer side regarding possible bankruptcy, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with two out of three indicators above average for Darden Restaurants. Leverage is at a rank of 70, meaning the company has a below-average debt-to-equity ratio. It has less debt than 70% of its competitors. Liquidity is also good at a rank of 98, meaning the company generates more profit to service its debt than 98% of its competitors. This indicates that the company is on the safer side when it comes to debt service. But Refinancing is lower at a rank of 41, which means that the portion of the debt that is about to be refinanced is above-average. It has more debt in the refinancing stage than 59% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 94 (better than 94% compared with alternatives), Darden Restaurants has a financing structure that is significantly safer than that of its competitors. The refinancing issues could be a short-term problem, especially if the company has reputation issues. Banks and investors don't like to refinance debt if there are clouds on the horizon. For this reason, investors should look at the refinancing environment for Darden Restaurants. Does it look safe that debt that is coming due can be covered with new debt? If that is the case, then the financing situation of the company is on the safer side. If not, it may be better to wait until refinancing has been completed and the Refinancing rank is good again. ...read more
Combined financial peformance: Darden Restaurants Top Financial Performance
| COMBINED PERFORMANCE | January 30, 2025 | |||||||
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| VALUE | ||||||||
| VALUE | 51 |
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| GROWTH | ||||||||
| GROWTH | 71 |
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| SAFETY | ||||||||
| SAFETY | 98 |
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| COMBINED | ||||||||
| COMBINED | 98 |
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ANALYSIS: With an Obermatt Combined Rank of 98 (better than 98% compared with investment alternatives), Darden Restaurants (Restaurants, USA) shares have much better financial characteristics than comparable stocks. Shares of Darden Restaurants are a good value (attractively priced) with a consolidated Value Rank of 51 (better than 51% of alternatives), show above-average growth (Growth Rank of 71), and are safely financed (Safety Rank of 94), which means low debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 98, is a strong buy recommendation based on Darden Restaurants's financial characteristics. As the company Darden Restaurants's key financial metrics all exhibit excellent performance, such as good value (Obermatt Value Rank of 51), above-average growth (Obermatt Growth Rank of 71), and indicate that the company is safely financed (Obermatt Safety Rank of 94), it is a solid stock investment where the risk of paying too much for the share is limited, unless the company has a bleak future. Such good financial performance can indicate that the company's future might actually be challenging, as it may be difficult to maintain the good performance. If they are safely financed and have been growing above average, and are still a good value, it means that the market is keeping prices low, for a reason which may become clearer over time. We recommend evaluating the future of Darden Restaurants. If you believe the company's future is market-typical or even better, this could be an argument for a share purchase. ...read more
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