Darden Stock Set to Sizzle After Blowout Q4 and $1B Buyback

Core Viewpoint - Darden Restaurants' stock price is expected to trend higher due to strong financial performance, guidance, growth prospects, dividends, and share buybacks [1][5][7]. Financial Performance - Darden Restaurants reported $3.3 billion in revenue for Q4 2025, reflecting a 10.6% increase year-over-year and surpassing consensus estimates by 120 basis points [5]. - Comparable store sales increased across major segments: Olive Garden by 6.9%, LongHorn Steakhouse by 6.7%, while Fine Dining contracted by 3.3% [5]. Margin and Capital Returns - Despite experiencing margin pressures, the company managed to maintain earnings growth, supporting a healthy balance sheet and capital return plans [6]. - The company has authorized an additional $1 billion in share buybacks, which is nearly 4% of the pre-release market capitalization [6]. Guidance and Outlook - The full-year outlook suggests high single-digit growth and substantial margins, with an expected adjusted EPS of $10.60, sufficient to cover $6 per share in dividends [7]. - Analysts maintain a Moderate Buy rating, with a projected earnings growth of 11.76% [9]. Balance Sheet Health - Darden's balance sheet shows increased cash and assets, with a 3% rise in shareholder equity and low leverage, as long-term debt is less than 1x equity [8]. Market Sentiment - Following the earnings release, Darden's stock price surged over 3%, indicating strong market sentiment and potential for further gains [10].