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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Darden Restaurants, Inc. (XNYS:DRI) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
DRI
Name:
DARDEN RESTAURANTS, INC. (XNYS:DRI)
Sector:
92.90M
Industry:
Restaurants
CEO:
Mr. Eugene Lee
Total Employees:
178,956
Our Technological Advancement Rating
Our Rating:
A
Technological advancement compared to industry is 333.50% higher
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF DARDEN RESTAURANTS, INC.(DRI) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND RESTAURANTS INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
125.17
One Month Price Target:
$126.08
Six Month Price Target :
$130.61
Likely Price in One Year's Time:
Ticker:
$136.04
Likely Trading Range Today Under (Normal Volatility)
$124.5
Price Upper limit ($) :
$126.02
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$116.07
This week:
$104.82
This month :
$84.48
Other Primary facts
Market Cap:
15.34B
Market Cap Classification:
Mid Cap
Number of Shares
IPO Date:
122.58M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
31.34%
-24.66%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$167.39
$147.99
$82.95
$102.35
Medium risk (<10%) entry points
Buy Call
Sell Call
$141.68
Buy Put:
Sell Put:
$137.54
$108.61
$112.80
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
DRI
Sharpe Ratio:
1.79%
Comparison:
DRI, is amongst the top 40% stocks with highest risk-adjusted returns
Sharpe ratio is 8.67% higher than the industry
& is -21.42% lower than the market/S&P 500 average
Average Returns/Yield of
DRI
Daily returns:
0.07%
Weekly returns:
0.36%
Monthly returns:
1.46%
Yearly returns:
16.01%
Comparison of returns:
Average annual returns/yield (last 3 years) is 9.22% above industry average
Classification:
DRI, is amongst the top 40% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.8
Statistical test of Returns:
DRI has not yielded statistically significant higher returns when compared to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
3.57%
Weekly Volatility:
7.99%
Monthly Volatility:
15.99%
Yearly Volatility:
55.38%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
1.26%
Volatility in last five trading days has been -64.85% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-7.27%
Weekly VaR:
-16.25%
Monthly VaR:
-32.51%
How Much Can the price of
DRI
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-28%
Worst case (decline):
>85%
This translates to price declining to:
$90.23
This translates to price declining to:
$18.78
Severe Crash Probability
Risk of crash in next 6/12 months: High (50-70%)
What is Value at Risk (VaR)?
Risk Fundamentals
DRI is a 129.45% riskier investment compared to the market/S&P 500 & is 96.57% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is 2.37% above industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
DRI
Beta in relation to market/S&P 500--1.29
Expected beta in 1 year's time:
0.956
Expected beta in 3 year's time:
1.352
Unlevered (debt free) Beta:
0.505
Beta in relation to Nasdaq (XNAS):
1.09
Beta in relation to all global stocks::
1.206
Beta Comparison & Analysis
Beta of competitors/peers::
1.18
Beta is 9.55% higher than peers
Average Industry Beta:
1.354
Beta is -4.53% below industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
14.27%
Sustainable growth rate is -53.00% below industry average
Alpha provided | Alpha Analysis
Alpha provided:
0.055
Alpha is 52.82% above industry average alpha yield
Alpha is 349% higher than market/& is unsustainably high
Analysis of Cost of Capital of
DRI
Equity cost of capital:
0.120
Equity cost of capital is -3.38% below industry mean WACC
Unlevered (without debt) cost of capital:
4.69%
Before-tax cost of debt:
-0.36%
After-tax cost of debt:
-0.28%
Overall debt rating:
Highest AAA investment grade
Weighted average cost of capital (WACC):
-0.28%
WACC is 54.45% above industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$78.56
Revenue growth rate per share of (3Y):
5.57
Annual revenue growth rate is -178.31% below industry average
EPS:
$7.40
Expected Annual growth rate of EPS (3Y):
11.16%
Expected future EPS growth rate is 225.37% higher than the Restaurants industry
Free cash flow (FCF) per share:
$7.69
Balance sheet equity growth per share: -38.55%
Equity growth rate per share is 298.52% higher than the industry
Debt per share
$40.12
EBITDA per share
$11.77
Valuation Analysis Today of
DRI
P/E Ratio:
16.88
P/E Ratio of Competitors/Peers:
18.53
P/E ratio is -8.90% lower than main peers & is -28.67% lower than the industry
Stock price/value with industry average P/E ratio: $175.09
DRI is -28.51% undervalued if valued using industry average P/E ratio
-
-
P/S (Price to Sales ratio):
1.59
Price to sales ratio is -51.16% below the industry mean
P/B (Price to book value ratio):
5.57
Price to free cash flow: 16.29
Price to free cash flow ratio is -57.04% lower than the industry
Net income growth rate (3Y):
0.41%
Net income growth rate is -99.77% lower than the industry average net income growth rate
Dividend Analysis
Dividend payout rate: 15.06%
Dividend yeild: 3.52%
Previous Dividend: $1.10
Previous adjusted dividend: $1.10
Previous Dividend: $4.40
Expected next dividend best case: $1.40
Expected next dividend worst case: $0.80
Average dividend payment (long-term): $0.86
Average dividend increase/decrease (growth rate) % per period: 15.03%
Expected next dividend payment date: 08/01/2022
Expected next dividend record date: 07/07/2022
Expected next dividend declaration date: 22/06/2022
Previous dividend payment date: 05/02/2022
Previous dividend record date: 04/08/2022
Previous dividend declaration date: 24/03/2022
Dividend History:
2022-04-07--$1.10
2021-10-07--$1.10
2021-04-08--$0.88
2022-01-07--$1.10
2021-07-08--$1.10
2021-01-07--$0.37
Dividend growth rate is -760.26% lower than the industry average
In-depth Debt & Leverage Analysis
Debt to equity ratio:
178.69%
Net debt to equity ratio:
144.26%
Debt to assets ratio:
46.66%
Net debt to assets ratio:
37.66%
Debt-to-asset ratio is -70.40% below industry average
Ability to repay debt:
Interest coverage ratio:
-82.43
Interest coverage ratio is -566.21% less than industry average
Looking forward:
Debt growth rate:
-7.78%
Annual debt growth is -121% lower than industry average debt growth rate
Debt repayment rate in last quarter: 0.05%
Analysis of Key Statistics
Correlation of price movement with the market:
0.644
Statistical significance of correlation:
DRI has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.517
Stock price is 24.50% more correlated with the market, compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.517
Correlation of price movement with Nasdaq (^IXIC):
0.009
Covariance of price movement with the market:
0.02
Kurtosis
18.271
Returns have severe fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are considerably more likely, compared to assets with normally distributed returns
Skewness of returns:
0.632
Returns are right (positive) skewed; mean returns are greater than median and mode returns
Fundamental Analysis & Dupont Analysis of
DRI
Gross Profit Margin Ratio:
131%
Operating Profit Margin Ratio:
12.08%
Operating profit margin is 28.45% higher than the industry
Net Profit Margin Ratio:
131%
Effective Tax Rate:
12.69%
Effective tax rate is -26.91% lower than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
34.62%
Return on equity (ROE) is 10715.75% higher than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
9.04%
Return on assets (ROA) is -36.33% lower than the industry
Financial Leverage:
1.9x
Current Ratio:
0.97
Current ratio is -13.93% below industry average
Cash Conversion Cycle (days):
-13.2
Cash conversion cycle is -139.71% below industry average
The remaining useful life of property plant & equipment is: 31.4 years
Stock based compensation to net income ratio:
2.90%
In-depth Efficiency Analysis
Revenue generated per employee:
53.8K
Each employee generates -52% less revenue than industry average revenue per employee
EBITDA generated per employee:
8.1K
Each employee generates -68% less EBITDA than industry average revenue per employee
Profit generated per employee:
5.3K
Each employee generates -63% less net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
0.5K
Each employee generates -79% less free cash flow than industry average revenue per employee
Assets/Capital per employee
49.6K
Each employee generates -79% less free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
-
-
Competitors/Peer firms of
DRI
Amcor plc (XNYS:AMCR)
DOMINO'S PIZZA, INC. (XNYS:DPZ)
WAYFAIR INC. (XNYS:W)
INTERNATIONAL PAPER COMPANY (XNYS:IP)
NVR, Inc. (XNYS:NVR)
CARMAX, INC. (XNYS:KMX)
GENUINE PARTS COMPANY (XNYS:GPC)
CHEWY, INC. (XNYS:CHWY)
BURLINGTON STORES, INC. (XNYS:BURL)
Current Analyst Ratings
Strong buy�25%
Buy�13%
Hold�71%
Sell�4%
Strong sell�0%
Overall analyst sentiment is: Hold
Income Statement
Period:
TTM
Date:
5/29/22
Revenue:
9.63B
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
6.38B
3.25B
-
370.80M
464.00M
93.20M
1.63B
2.09B
-
- 17500.00K
368.40M
1.44B
1.16B
952.80M
1.09B
138.80M
952.80M
Statement of Cash Flow
Date:
Period:
89.00M
Differed Income Tax :
- 5400.00K
Stock Based Compensation :
27.60M
Change in Working Capital :
- 157200.00K
Accounts Receivables:
-
Other Working Capital:
500.00K
Other Non-Cash Items:
- 3800.00K
Net Cash Provided by Operating Activities:
181.10M
Investments in PP&E:
- 82700.00K
Net Acquisitions:
-
Purchases of Investments:
-
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
8/29/21
2022
Q1
947.80M
-
947.80M
67.60M
210.90M
431.70M
1.66B
6.73B
1.04B
806.30M
-
-
306.60M
8.88B
-
10.54B
325.00M
-
102.80M
447.10M
942.90M
1.72B
4.92B
939.70M
6.07B
-
7.79B
2.30B
445.90M
5.8M
-
August 29, 2021 at 6:00:00 AM
8.47B
2.75B
10.54B
-
4.92B
4.0B
-
- 1000.00K
- 83700.00K
- 2600.00K
19.60M
- 186300.00K
- 143500.00K
-
- 312800.00K
-
- 215400.00K
999.30M
1.21B
181.10M
- 88200.00K
92.90M
Our Proprietary Portfolio Rating
Our Rating:
A+
Price Forecast/Expected Price in Next 5 Years of
DRI
2023
2024
2025
2026
2027
$157.84
$171.54
$186.44
$202.64
$220.23