Restaurant Stock Slips Away From Highs Before Earnings

The company will report earnings before the open this Thursday

Deputy Editor
Sep 18, 2023 at 11:17 AM
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Olive Garden parent Darden Restaurants Inc (NYSE:DRI) is gearing up for this week's earnings report, scheduled before the open on Thursday, Sept. 21. The stock has closed lower following its last four reports, including a 4.4% drop in September 2022. In the past two years, DRI has averaged a next-day swing of 2.8%, regardless of direction. This time around the options pits are pricing in a post-earnings move of 4.7%. 

On the charts, DRI has been on a decline since its July 21, record high of $173.06, with pressure at its descending 20-day moving average. The security down 0.7% at $149.08 today, and up 7.9% since the start of the year. 

The brokerage bunch leans bullish on DRI. Of the 22 analysts in coverage, 16 carry a "buy" or better rating on Darden Restaurants stock, with six a tepid "hold," and no "sell" ratings in sight. The 12-month consensus price target of $172.92 is a 15.7% premium to current levels. 

The security is seeing well-priced premiums at the moment, too, per its Schaeffer's Volatility Index (SVI) of 24%, which ranks in the 25th percentile of its annual range. This means options traders are pricing in relatively low volatility expectations at the moment. 


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