DRI Should I Buy
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Darden Restaurants Inc (DRI) is not a strong buy for a beginner, long-term investor at this time. While the company shows positive financial growth trends and some analyst upgrades, the lack of strong trading signals, increased insider and hedge fund selling, and mixed analyst sentiment suggest a cautious approach. The current price trend and technical indicators do not present a compelling entry point for long-term investment.
The MACD is positive at 0.312, indicating bullish momentum, but it is contracting. RSI is neutral at 59.224, showing no clear signal. Moving averages are bullish (SMA_5 > SMA_20 > SMA_200). Key support and resistance levels suggest limited upside potential in the short term, with resistance at 218.237 and support at 199.183.
Revenue increased by 7.34% YoY, net income grew by 10.27% YoY, and EPS rose by 11.54% YoY in Q2
Some analysts, such as Melius Research and Mizuho, upgraded the stock with higher price targets, citing strong market share gains and potential benefits from casual dining tailwinds.
Hedge funds and insiders are selling significantly, with hedge fund selling up 1366.73% and insider selling up 310.23%.
Truist and Raymond James downgraded the stock, citing challenges such as beef price inflation, lack of sales drivers, and limited room for multiple expansion.
Gross margin dropped by 5.48% YoY, indicating cost pressures.
In Q2 2026, Darden's revenue increased to $3.102 billion (+7.34% YoY), net income rose to $237.2 million (+10.27% YoY), and EPS improved to $2.03 (+11.54% YoY). However, gross margin declined to 15.86% (-5.48% YoY), reflecting rising costs.
Analyst sentiment is mixed. While Melius and Mizuho upgraded the stock with higher price targets, other firms like Truist and Raymond James downgraded it, citing challenges such as beef price inflation and limited growth drivers. Price targets range from $206 to $265, with a median target around $220.
