Darden Restaurants (DRI) Could Be 11% Undervalued As Key Leases Get Extended
Darden Restaurants (DRI) is back in focus after Four Corners Property Trust extended all Olive Garden and LongHorn leases maturing in 2027 by roughly five years, with 1.5% annual rent increases.
Against this leasing backdrop, Darden Restaurants’ share price has held at US$208.52, with a 7-day share price return of 3.49% and year-to-date gain of 11.38%, while the 1-year total shareholder return of 14.22% and 5-year total shareholder return of 71.84% indicate momentum that has generally rewarded patient holders.
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After that lease news and a move to US$208.52, Darden Restaurants now trades a little below both analyst targets and intrinsic estimates. So where does a reasonable fair value range land for this stock today?
Most Popular Narrative: 11% Undervalued
On the most followed view, Darden Restaurants screens as undervalued, with a fair value of $233.44 versus the recent $208.52 share price. This puts the current multiple and narrative assumptions under the spotlight.
Darden Restaurants is stepping up unit growth with 71 openings in fiscal 2026 and guidance for 75 to 80 new openings plus 11 Bahama Breeze conversions in fiscal 2027, and is using smaller Yard House prototypes to lower build costs. Together, these factors can increase total system sales while spreading fixed costs and supporting earnings over time.
See why 15 investors see Darden Restaurants as 11% undervalued.
Result: Fair Value of $233.44 (UNDERVALUED)
Still, softer guest counts across casual dining and lingering weakness in Olive Garden weekday lunch traffic could pressure Darden Restaurants if newer concepts fail to fully offset the gap.
Find out about the key risks to this Darden Restaurants narrative.
Next Steps
Mixed signals on Darden Restaurants so far. If you want your view grounded in more than headlines, consider the trade-offs yourself and check the 4 key rewards and 3 important warning signs.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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