Darden Restaurants Started as a “Buy” at Janney Montgomery Scott (DRI)


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Restaurant chain operator Darden Restaurants, Inc. ( DRI ) on Wednesday saw its coverage initiated with a "Buy" rating by analysts at Janney Montgomery Scott.

The firm also set a $54 price target on DRI, which represents an expected 22% upside to the stock's Tuesday closing price of $44.38.

A JMS analyst commented, "We view the potential positives for the company and its stock as outweighing the risks. Among the positive factors for the company and its stock are - according to our industry sources - a recent turn for the better in casual-dining same-store sales, the solid strategic positioning of Olive Garden (which should help it achieve additional market-share gains), and a possible return to positive territory for Red Lobster's same-store sales during ( May) fiscal 2011."

Darden shares were mostly flat in premarket trading Wednesday.

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 2.88%, based on last night's closing stock price of $44.38. The stock has technical support in the $40 price area. If the shares can firm up, we see overhead resistance around the $45-$48 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 Nasdaq, Inc.

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