Darden Restaurants heads into its June 18 Q4 earnings report with analyst conviction running ahead of where the stock actually trades.
The bullish setup is clearest in recent analyst activity. BofA Securities raised its target to $276 just ten days ago — a level roughly 30% above the current price of $211.47 — while maintaining a Buy. That sits well above the Street consensus target of $226, which itself implies modest upside from here. The broader direction of travel among analysts has been uniformly constructive: targets were lifted across the board following the March print, with Citigroup, Deutsche Bank, Barclays, and Evercore all nudging higher while holding positive ratings. Only Wells Fargo and Stephens remain at hold-equivalent ratings, with targets near $210. The bull case rests on Darden's pricing power, cost discipline, and the resilience of its multi-brand portfolio through an inflationary cycle. Bears point to consumer sentiment risk, competitive pressure in casual dining, and potential margin erosion as unit growth picks up.
Short interest adds a modest counterweight to the bullish analyst picture. At 5% of the free float, it is not extreme — but it has climbed roughly 5% over the past week, recovering ground lost in late May when shorts had pared back to around 5.5 million shares. Borrow conditions give no sense of urgency on the short side: cost to borrow is running near 0.43%, and availability is ample at 755% of shares already borrowed, meaning the lending pool remains far from stressed. That said, the short score has drifted higher through the first two weeks of June, reaching 45.2 — its highest reading in the recent window — suggesting incremental bearish positioning building into the print.
Options positioning does not tell a particularly alarmed story. The put/call ratio is at 1.23, essentially in line with its 20-day average of 1.24 and with a z-score near zero. That compares to a 52-week high of 1.58 reached earlier this year — the current reading is far from that extreme. One peer dynamic worth noting: Cracker Barrel is up 39% on the week and BJ's Restaurants jumped 22%, while Darden gained a more measured 6.7%. That selective peer surge, combined with Darden's relatively contained short positioning and broadly constructive analyst posture, suggests the market sees the stock as a steadier compounder rather than a momentum name.
The June 18 print will test whether Darden's same-restaurant sales trajectory and margin guidance justify the gap between the current price and an analyst consensus that has been steadily migrating higher.
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