Darden Restaurants Stock Brushes Off Beat-and-Raise

Increased traffic contributed to the company's strong results

Digital Content Manager
Mar 23, 2023 at 10:48 AM
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Darden Restaurants, Inc. (NYSE:DRI) stock is down 2% to trade at $147.97 this morning, despite the restaurant operator's better-than-expected fiscal third-quarter report.

The company posted adjusted earnings of $2.34 per share and revenue of $2.79 billion, attributing the strong results to increased traffic at Olive Garden and LongHorn Steakhouse locations. Darden Restaurants also raised its annual sales forecast, though it warned beef prices are on the rise.

So far today, 2,609 calls and 1,193 puts have already crossed the tape, which is 14 times the volume typically seen at this point. Most popular is the April 150 call, where new positions are being opened.

Options traders have been more optimistic than usual for some time. DRI's 50-day call/put volume ratio of 1.07 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) ranks higher than 86% of readings from the past year. 

Options look like a solid way to bet on Darden Restaurants stock's next moves. This is per the equity's Schaeffer's Volatility Index (SVI) of 29% that sits higher than just 28% of annual readings.

The security is cooling from yesterday's one-year high of $154.09, but the 20-day moving average looks poised to contain this pullback. Year-over-year, DRI is up 12.9%, and still sports a 7% lead in 2023.

 

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