DRI
Darden Restaurants, Inc.
$203.51
Stable Earnings Power
80%
P/Adj-EPS × Normalized Multiple
Mild
·
Conviction
Fair Value
Trading 6.3% below fair value
You pay
$203.51
Bear
$181.87
Fair
$217.24
Bull
$252.61
Bear
$181.87
-10.6%
$9.90 × 18x P/E
Fair
$217.24
+6.7%
$9.90 × 22x P/E
Bull
$252.61
+24.1%
$9.90 × 25x P/E
Key Value Driver
Normalized P/E multiple (22x base case)
Implied Market Multiple
20.6x
Summary
Our base-case estimate uses a valuation based on adjusted earnings per share and a normalized price-to-earnings multiple. We then blend that result with the average analyst price target of $225.36 from 59 analysts, using a 35% weight on analyst consensus. That produces an estimated intrinsic value of $217.24 per share.
Warnings
Dividend-based valuation: $398.88 (above our primary estimate by 87%). Large gaps may signal the dividend doesn't reflect full earning power.
Key Risks
- Growth DCF inappropriate — terminal value assumptions dominate
- EV/EBITDA misleading for regulated businesses where capex is mandated
- Regulatory risk is a fat tail not visible in normal multiples