Mizuho Sees Sales Upside at Darden (DRI), Flags Ongoing Commodity Cost Pressure

Core Insights - Darden Restaurants, Inc. (NYSE:DRI) is recognized as one of the best dividend stocks to invest in for January [1] - Mizuho analyst raised the price target for Darden to $195 from $185 while maintaining a Neutral rating, citing upside in same-store sales growth but ongoing commodity cost pressures [2] - Darden has increased its full-year sales outlook, attributing steady demand across its brands, particularly Olive Garden, which is appealing to cost-conscious diners [3] Financial Performance - Darden expects same-restaurant sales growth of 3.5% to 4.3% for fiscal 2026, an increase from the previous forecast of 2.5% to 3.5% [4] - The company reaffirmed its annual EPS outlook of $10.50 to $10.70, with Olive Garden reporting a 4.7% increase in same-store sales and LongHorn Steakhouse achieving a 5.9% gain [5] Strategic Decisions - Darden has opted to absorb tariff-related cost pressures instead of raising menu prices, reflecting consumer selectivity in dining choices [4] - The company is gaining market share from both casual-dining competitors and limited-service restaurants, indicating resilience among consumers despite cautious spending [4]