Mizuho Sees Sales Upside at Darden (DRI), Flags Ongoing Commodity Cost Pressure

Darden Restaurants, Inc. (NYSE:DRI) is included among the 13 Best January Dividend Stocks to Invest in.

On December 22, Mizuho analyst Nick Setyan raised the firm’s price target on Darden Restaurants, Inc. (NYSE:DRI) to $195 from $185 and kept a Neutral rating on the shares. The firm updated its estimates after the company released earnings. Darden delivered some upside in same-store sales growth during fiscal Q2. That strength didn’t fully offset higher-than-expected commodity inflation, the analyst wrote in a research note.

Earlier in December, Darden Restaurants, Inc. (NYSE:DRI) lifted its full-year sales outlook. Management pointed to steady demand across its brands, including Olive Garden, where affordable pricing continues to attract cost-conscious diners.

Darden, which operates full-service concepts such as Ruth’s Chris Steak House, Cheddar’s Scratch Kitchen, and Yard House, has chosen to absorb tariff-related cost pressures rather than raise menu prices. That decision reflects how selective consumers remain when it comes to dining out. The company now expects same-restaurant sales growth of 3.5% to 4.3% in fiscal 2026, up from its earlier forecast of 2.5% to 3.5%. During the earnings call, executives said Darden is taking market share from both casual-dining peers and limited-service restaurants. “The consumer remains resilient but cautious amid weaker sentiment,” CEO Rick Cardenas said, pointing to some pullback among lower-income diners.

Darden reaffirmed its annual EPS outlook of $10.50 to $10.70 and noted that beef prices are likely to pressure margins in the third quarter. Same-store sales at Olive Garden increased 4.7% during the quarter. LongHorn Steakhouse posted a 5.9% gain, driven by menu updates and value-focused promotions aimed at middle-income customers.

Darden Restaurants, Inc. (NYSE:DRI) owns and operates full-service restaurants across the United States and Canada.

While we acknowledge the potential of DRI as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you’re looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

READ NEXT: 12 Best Income Stocks to Buy Now and 20 Best Performing Dividend Stocks in 2025

Disclosure: None.