Darden Restaurants Downgraded to “Hold” at Standpoint Research; Valuation Call (DRI)

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Restaurant chain operator Darden Restaurants, Inc. ( DRI ) on Tuesday caught a downgrade from analysts at Standpoint Research.

The firm cut its rating on DRI from "Buy" to "Hold," noting that "DRI is now just 11% off an all-time high, +2500 bps versus the S&P since January and + 1100 bps since our recommendation."

Continuing, "DRI is a (relative to its sector and industry) low-beta name and served its purpose for us as a consumer discretionary hedge in a declining market. We would lock in the gains here. The shares are up 25% year-to-date and are fairly valued."

Darden Restaurants shares were mostly flat in premarket trading Tuesday.

The Bottom Line
We had removed shares of DRI from our recommended list back on May 14, when the stock was trading at $44.20. The company has a dividend yield of 3.09%, based on last night's closing stock price of $41.38. The stock has technical support in the $38 price area. If the shares can firm up, we see overhead resistance around the $45-$46 price levels.

Darden Restaurants, Inc. ( DRI ) is not recommended at this time, holding a Dividend.com DARS™ Rating of 3.4 out of 5 stars.

Be sure to visit our complete recommended list of the Best Dividend Stocks , as well as a detailed explanation of our ratings system here .



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

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