Favorable consumer exposure should continue to help Darden Restaurants gain market share, according to Goldman Sachs. The bank upgraded the restaurant operator to buy from neutral. Analyst Christine Cho left her 12-month price target unchanged at $225, implying upside of 20%. Shares of Darden Restaurants have added 1% this year, but Cho said that Darden Restaurant’s somewhat elevated current valuation still seems justified. The company owns restaurant chains such as Olive Garden Italian Restaurant, Cheddar’s Scratch Kitchen, LongHorn Steakhouse and The Capital Grille. DRI YTD mountain DRI YTD chart “We believe the 19x multiple (implying a premium to casual dining peers) is appropriate given the company’s diversified restaurants, success at LongHorn, and size/strength of the balance sheet,” she wrote. Cho pointed to the improving value proposition of casual dining, with Darden a key beneficiary of accelerated middle-income quintile pre-savings growth. The resilience of the fast casual food category also comes from its relatively smaller exposure to the lower income consumers that have been under more pressure in the current macroeconomic environment, Cho noted. Compelling value and scale at both Olive Garden has successfully served to help drive share gains, Cho added. She applauded promotions such as the Never Ending Pasta Bowl starting at $13.99. Olive Garden has proved flexible in its strategy, with the brand testing lower price menu offerings currently in many of its locations. Meantime, continued strength at LongHorn has been driven by improving taste, service and quality metrics, per the analyst. “We also attribute the brand’s strength to its persistent value, with management highlighting higher frequency across all income cohorts, including some trade down from higher income groups and some trade up from lower income groups,” Cho wrote. Darden rose 1% in thin premarket trading after the upgrade. LSEG data shows that 19 of 33 analysts rate Darden a buy or strong buy. Another 13 have a hold rating on it, with one designating it as underperform. ( Learn the best 2026 strategies from inside the NYSE with Josh Brown and others at CNBC PRO Live. Tickets and info here . )
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