Darden Stock Story


USD 113.87  1.23  1.07%   

As many millenniums are trying to avoid consumer cyclical space, it makes sense to concentrate on Darden Restaurants a little further and try to understand its current market patterns. We will evaluate if Darden Restaurants shares are reasonably priced going into July. Is the entity current valuation justified for 2022? Here i will cover my perspective on valuation to give Darden stockholders a better outlook on taking a position in the stock.
Published few days ago
View all stories for Darden Restaurants | View All Stories

Darden Restaurants Current Investor Sentiment

Investor biases related to Darden Restaurants' public news can be used to forecast risks associated with investment in Darden. The trend in average sentiment can be used to explain how an investor holding Darden can time the market purely based on public headlines and social activities around Darden Restaurants. Please note that most equiteis that are difficult to arbitrage are affected by market sentiment the most.
Darden Restaurants' market sentiment shows the aggregated news analyzed to detect positive and negative mentions from the text and comments. The data is normalized to provide daily scores for Darden Restaurants' and other traded tickers. The bigger the bubble, the more accurate is the estimated score. Higher bars for a given day show more participation in the average Darden Restaurants' news discussions. The higher the estimate score, the more favorable is the investor's outlook on Darden Restaurants.

Darden Restaurants Maximum Pain Price across 2022-07-15 Option Contracts

Darden Restaurants' options can also be used to analyze investors' bias and current market sentiment in the context of behavioral finance. For example, Max pain usually refers to a trading concept that asserts that market manipulation can cause the market price of Darden Restaurants close to the expiration of its current option contract to expire worthlessly. According to most research, about 35% of options are not executed, with roughly 50% traded out before expiration. So, Max pain occurs when market makers reach a net favorable position across all options at a strike price where option holders stand to lose the most money. By contrast, option sellers may reap the most after selling more options than buying, causing them to expire worthlessly. Please continue to view the detailed analysis of Darden Restaurants' options.
Do not exit Darden Restaurants quite yet!
Darden Restaurants has 5.87 B in debt with debt to equity (D/E) ratio of 2.57, meaning that Darden Restaurants heavily relies on borrowing funds for operations. The entity has a current ratio of 0.69, suggesting that it has not enough short term capital to pay financial commitments when the payables are due. Debt can assist Darden Restaurants until it has trouble settling it off, either with new capital or with free cash flow. So, Darden Restaurants' shareholders could walk away with nothing if the company can't fulfill its legal obligations to repay debt. However, a more frequent occurrence is when companies like Darden Restaurants sell additional shares at bargain prices, diluting existing shareholders. Debt, in this case, can be an excellent and much better tool for Darden to invest in growth at high rates of return. When we think about Darden Restaurants' use of debt, we should always consider it together with cash and equity.Darden Restaurants is UNDERVALUED at 128.27 per share with modest projections ahead.
We determine the current worth of Darden Restaurants using both absolute as well as relative valuation methodologies to arrive at its intrinsic value. In general, an absolute valuation paradigm, as applied to this company, attempts to find the value of Darden Restaurants based exclusively on its fundamental and basic technical indicators. By analyzing Darden Restaurants's financials, quarterly and monthly indicators, and related drivers such as dividends, operating cash flow, and various types of growth rates, we attempt to find the most accurate representation of Darden Restaurants's intrinsic value. In some cases, mostly for established, large-cap companies, we also incorporate more traditional valuation methods such as dividend discount, discounted cash flow, or asset-based models. As compared to an absolute model, our relative valuation model uses a comparative analysis of Darden Restaurants. We calculate exposure to Darden Restaurants's market risk, different technical and fundamental indicators, relevant financial multiples and ratios, and then comparing them to Darden Restaurants's related companies.

Darden Restaurants Investment Alerts

Darden investment alerts and warnings help investors to get more proficient at understanding not only critical technical and fundamental signals but also the significant portfolio-centered indicators. These indicators include beta, alpha, and other risk-related measures that will help you in monitoring Darden Restaurants performance across your portfolios.Please check all investment alerts for Darden

Darden Restaurants Valuation Ratios as Compared to Competition

Our valuation model uses many indicators to compare Darden value to that of its competitors to determine the firm's financial worth. You can analyze the relationship between different fundamental ratios across Darden Restaurants competition to find correlations between indicators driving the intrinsic value of Darden.

What do experts say?

Stock analysis is a method for investors and traders to make buying and selling decisions. By studying and evaluating past and current data, investors and traders attempt to gain an edge in the markets by making informed decisions.
It is good to see analyst projects for Darden Restaurants, but it might be worth checking our own buy vs. sell analysis

Darden Restaurants exotic insider transaction detected

Legal trades by Darden Restaurants insiders are very common, as founders, directors, or employees of any publicly traded firm often have stock or stock options. These trades are made public in the United States through the filing of Form 4 of the Securities and Exchange Commission. Below entry was recorded recently and is publicly available as an insider trade:
Darden insider trading alert for general transaction of common stock by Eugene Lee, Executive Chairman, on 23rd of June 2022. This event was filed by Darden Restaurants Inc with SEC on 2022-06-23. Statement of changes in beneficial ownership - SEC Form 4. Eugene Lee currently serves as chairman of the board, chief executive officer of Darden Restaurants [view details]   
Note, although insider trading is legal, in the United States, Canada, Australia, and Germany, for mandatory reporting purposes, corporate insiders are defined as a company's officers, directors, and any beneficial owners of more than 10% of a class of the company's equity securities.

A Deeper Perspective

Darden Restaurants price drop over the last few months could raise concerns from stockholders as the firm is trading at a share price of 115.12 on 2,059,500 in volume. The company directors and management were not very successful in positioning the firm resources to exploit market volatility in May. However, diversifying your holdings with Darden Restaurants or similar stocks can still protect your portfolio during high-volatility market scenarios. The stock standard deviation of daily returns for 90 days investing horizon is currently 2.35. The current volatility is consistent with the ongoing market swings in May 2022 as well as with Darden Restaurants unsystematic, company-specific events.
 2014 2019 2021 2022 (projected)
Interest Expense50.2 M63.5 M57.3 M72.6 M
Gross Profit1.85 B1.49 B1.41 B1.61 B

Margins Breakdown

Darden profit margins show the degree to which it makes money. Margin indicators are used not only by investors but also by creditors or Darden Restaurants itself as indicators of financial health and management effectiveness. Please look more closely at the different varieties of Darden Restaurants profit margins.
Gross Margin
Operating Margin0.63
EBITDA Margin0.0328
Gross Margin0.18
Profit Margin(0.007184)

Darden Restaurants Average Assets is nearly stable at the moment. Also, Darden Restaurants Net Income Per Employee is decreasing over the last 5 years. The current value of Darden Restaurants Net Income Per Employee is -297.63.

Will price continue to rise in July 2022?

The standard deviation is down to 2.29 as of today. Darden Restaurants exhibits very low volatility with skewness of -0.5 and kurtosis of 0.65. However, we advise investors to further study Darden Restaurants technical indicators to make sure all market info is available and is reliable. Understanding different market volatility trends often help investors to time the market. Properly using volatility indicators enable traders to measure Darden Restaurants' stock risk against market volatility during both bullying and bearish trends. The higher level of volatility that comes with bear markets can directly impact Darden Restaurants' stock price while adding stress to investors as they watch their shares' value plummet. This usually forces investors to rebalance their portfolios by buying different stocks as prices fall.

Darden Restaurants Implied Volatility

Darden Restaurants' implied volatility exposes the market's sentiment of Darden Restaurants stock's possible movements over time. However, it does not forecast the overall direction of its price. In a nutshell, if Darden Restaurants' implied volatility is high, the market thinks the stock has potential for high price swings in either direction. On the other hand, the low implied volatility suggests that Darden Restaurants stock will not fluctuate a lot when Darden Restaurants' options are near their expiration.

While some firms under the restaurants industry are still a bit expensive, Darden Restaurants may offer a potential longer-term growth to stockholders. To conclude, as of the 23rd of June 2022, we see that Darden Restaurants almost mirrors the market. The company is undervalued with low probability of bankruptcy within the next 24 months. Our up-to-date 90 days buy-or-sell advice on the company is Buy.

Editorial Staff

This story should be regarded as informational only and should not be considered a solicitation to sell or buy any financial products. Macroaxis does not express any opinion as to the present or future value of any investments referred to in this post. This post may not be reproduced without the consent of Macroaxis LLC. Macroaxis LLC and Ellen Johnson do not own shares of Darden Restaurants. Please refer to our Terms of Use for any information regarding our disclosure principles.

Would you like to provide feedback on the content of this article?

You can get in touch with us directly or send us a quick note via email to editors@macroaxis.com