Darden Earnings: Shares Look Expensive After Surge on Solid but Unspectacular Results

While narrow-moat Darden Restaurants reported solid fiscal 2025 second-quarter results, we saw little that would justify wholesale changes to our $141 fair value estimate. We expect to lift our valuation by a low-single-digit percentage, consistent with time value, leaving the shares meaningfully overpriced after a 15% surge in intraday trading Dec. 19. Results were as expected, with $2.89 billion in revenue narrowly missing our $2.91 billion estimate while adjusted earnings per share of $2.03 edged our $2.00 expectation. We expect little change to our long-term outlook for compound annual growth rates of 6% for revenue, 7% for operating profit, and 10% for diluted EPS.