Darden Restaurants Stock Pops on Earnings Beat

Darden also lifted its full-year profit forecast

Deputy Editor
Mar 21, 2019 at 9:40 AM
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The shares of Darden Restaurants Inc (NYSE:DRI) are up 4.1% at $113.05 in early trading after this morning's fiscal third-quarter earnings report exceeded analysts' expectations on the top and bottom line. The company also lifted its full-year profit guidance. CEO Gene Lee cited strong sales in its Olive Garden and Longhorn Steakhouse franchises.  

The 200-day moving average has acted as a floor for DRI of late, with the equity bouncing atop the trendline in an attempt to rebound off its late-December dip. The stock is up 21.2% year-over-year, and will now try to break above a recent ceiling near the $114 level. 

Analysts are already waxing bullish on the casual dining concern. Fourteen of the 23 analysts following the stock call it a "strong buy," while only one says "sell." Some price-target hikes could add tailwinds, however. Currently, the consensus 12-month target price of $121.23 is at a slim 7.2% premium to current levels. 

While short interest has begun to unravel, the 6.51 million shares sold short still represent 5.3% of the stocks available float. At the stock's average daily trading volume, it would take over seven days to buy back these bearish bets, leaving plenty of room for a short squeeze. 

 

 

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