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An Appetizing Restaurant Stock For Value Investors

Earnings Preview

Darden Restaurants (NYSE:DRI) is expected to report earnings on Tuesday before the market opens. While shareholders have enjoyed a 12% increase over the last twelve months, shares still appear undervalued on a fundamental basis.

The company's shares last traded at $76.62 as of Thursday, approximately 97% of its all-time high. This is partially due to Darden's stellar performance over the last several quarters. According to Zacks Investment Research, this casual dining restaurant chain has beaten earnings estimates on an average of 2.6% over the last four quarters.

The chart below highlights Darden's impressive earnings per share (EPS) growth YoY over the previous five quarters. 

Expect Another Impressive Quarter

The Olive Garden brand currently represents approximately 50% of total company revenue and nearly 60% of total EBITDA. This Italian-American cuisine chain is currently implementing a set of initiatives that will help grow its top and bottom line. These initiatives include remodeling its restaurants and developing new menu items for health conscious consumers while simplifying kitchen systems. The launch of Olive Garden's to-go business in addition to its tablet rollout is expected to improve overall customer satisfaction.

Continue reading An Appetizing Restaurant Stock For Value Investors.

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