In a recent transaction, Ricardo Cardenas, President and CEO of Darden Restaurants Inc. (NYSE:DRI), sold a significant number of shares in the company. The executive parted with a total of 42,403 shares of common stock, which fetched a combined value exceeding $7.2 million. The sales were executed in multiple trades with prices ranging between $171.43 and $172.20 per share.
The transaction was disclosed in a regulatory filing with the Securities and Exchange Commission. On the same day, Cardenas also acquired shares through option exercises, which are part of the company's compensation program. These transactions included the acquisition of 23,222 shares at a price of $59.68 each and 19,181 shares at $85.83 per share, amounting to a total of over $3 million.
It's worth noting that the CEO's stock sales represent a portion of his holdings in the company. According to the filing, following the transactions, Cardenas still owns a substantial number of shares, bolstered by acquisitions through the Darden Restaurants, Inc. Employee Stock Purchase Plan and dividend reinvestment.
The filing also indicated that the options exercised by Cardenas vested in two equal annual installments, with the first starting in July 2019 and the second in July 2020. These options are set to expire in July 2026 and July 2027, respectively.
Investors often keep a close eye on insider transactions as they can provide valuable insights into executives' perspectives on the company's future performance. However, it is also common for executives to sell shares for personal financial planning, diversification, and other non-company-specific reasons.
Darden Restaurants Inc. is known for its portfolio of popular dining brands and has established a significant presence in the eating places sector. The company's stock performance and executive transactions are closely monitored by investors seeking to gauge the health of the restaurant industry and consumer spending trends.
In other recent news, Darden Restaurants reported a modest 1% increase in sales, reaching $2.8 billion, and announced the future acquisition of Chuy's, expected to have a neutral impact on earnings per share. Despite falling short of earnings per share expectations, Darden reiterated its full-year guidance. The company has entered into a delivery service partnership with Uber (NYSE:UBER) and is optimistic about the potential benefits of this collaboration. Several financial firms have adjusted their price targets for Darden Restaurants. KeyBanc Capital Markets raised its target to $194, BMO Capital to $175, Raymond James to $187, and TD Cowen to $165, while Jefferies increased its target to $136. Evercore ISI upgraded the stock to "Outperform" and raised its target to $205, while Piper Sandler maintained a neutral stance with a $177 target. These recent developments reflect Darden's strategic initiatives to navigate the competitive landscape and capitalize on emerging business opportunities.
InvestingPro Insights
As investors scrutinize the recent insider transactions by Darden Restaurants Inc. (NYSE:DRI) CEO Ricardo Cardenas, it's important to consider the company's financial metrics and market performance that provide a broader context. According to InvestingPro data, Darden Restaurants currently holds a market capitalization of $20.14 billion, with a Price/Earnings (P/E) ratio of 19.39. This valuation comes as the company has experienced a revenue growth of nearly 6% over the last twelve months as of Q1 2023.
Notably, Darden's stock has seen a significant return over the last week, with a 7.52% price total return, and is trading near its 52-week high, at 95.83% of this benchmark. This could signal investor confidence in the company's current trajectory. However, an InvestingPro Tip suggests caution, as the Relative Strength Index (RSI) indicates the stock is currently in overbought territory, which could imply a potential pullback in the near term. Additionally, the company is trading at a high Price/Book multiple of 9.4, which may be of interest to value-focused investors.
For those interested in income-generating investments, Darden has a track record of consistent dividend payments, having maintained dividend payments for 30 consecutive years and raised its dividend for the past four years. The current dividend yield stands at 3.27%, with a dividend growth of 6.87% over the last twelve months as of Q1 2023.
For further insights, Darden Restaurants Inc. offers over 11 additional InvestingPro Tips, which can be accessed for a more comprehensive analysis. These tips and real-time metrics are available at https://www.investing.com/pro/DRI, and they may assist investors in making informed decisions regarding their investment in the company.
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