DCF Studio

    DRI · NYQ · Consumer Cyclical

    Darden Restaurants, Inc.

    Also onShortfallConsensus DriftCrosscheck

    Implied value per share

    USD 219.24

    Market price

    USD 222.83

    Implied upside

    -1.6%

    10-year forecast · Perpetuity growth terminal value · Mid-year discounting · Base case · Price 2026-11-02 · Accounts to 2026-05-31

    AdjustedCapital expenditure runs at 5.6% of revenue against depreciation of 4.1%. A perpetuity has to be a steady state, so the forecast tapers capex to maintenance at depreciation plus the reinvestment terminal growth requires (g/ROIC of NOPAT), and the terminal year carries on from there. The bridge is shown under Terminal Value.

    Value Per Share

    Perpetuity growth
    USD 219.24-1.6%
    Exit multiple
    USD 243.34+9.2%
    Market price
    USD 222.83

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (USD). Outflows negative.

    0bn1bn2bnFY27FY28FY29FY30FY31FY32FY33FY34FY35FY36
    Nominal FCFFDiscounted to todayUSD
    LineFY27FY28FY29FY30FY31FY32FY33FY34FY35FY36CAGR
    RevenueUSD 13.7bnUSD 14.5bnUSD 15.4bnUSD 16.1bnUSD 16.9bnUSD 17.6bnUSD 18.3bnUSD 18.9bnUSD 19.5bnUSD 20.0bn+4.3%
    EBITUSD 1.6bnUSD 1.7bnUSD 1.8bnUSD 1.9bnUSD 2.0bnUSD 2.1bnUSD 2.2bnUSD 2.2bnUSD 2.3bnUSD 2.4bn+4.3%
    NOPATUSD 1.4bnUSD 1.5bnUSD 1.6bnUSD 1.7bnUSD 1.8bnUSD 1.8bnUSD 1.9bnUSD 2.0bnUSD 2.0bnUSD 2.1bn+4.3%
    Add depreciation & amortisationUSD 556.9mUSD 590.8mUSD 624.0mUSD 656.3mUSD 687.4mUSD 716.8mUSD 744.4mUSD 769.6mUSD 792.3mUSD 812.1m+4.3%
    Less capital expenditureUSD -770.9mUSD -803.3mUSD -833.2mUSD -860.3mUSD -884.1mUSD -904.5mUSD -921.0mUSD -933.4mUSD -941.5mUSD -945.1m+2.3%
    Capex, % of revenue5.6%5.5%5.4%5.3%5.2%5.1%5.0%4.9%4.8%4.7%-
    Less increase in working capitalUSD 3.2mUSD 5.4mUSD 5.3mUSD 5.2mUSD 5.0mUSD 4.7mUSD 4.4mUSD 4.0mUSD 3.6mUSD 3.2m+0.1%
    Free cashflow to firmUSD 1.2bnUSD 1.3bnUSD 1.4bnUSD 1.5bnUSD 1.6bnUSD 1.7bnUSD 1.7bnUSD 1.8bnUSD 1.9bnUSD 2.0bn+5.4%
    Discount factor0.96480.89820.83610.77830.72460.67450.62790.58450.54410.5065-
    Present valueUSD 1.2bnUSD 1.2bnUSD 1.2bnUSD 1.2bnUSD 1.1bnUSD 1.1bnUSD 1.1bnUSD 1.1bnUSD 1.0bnUSD 989.0m-
    Present Value Of The ForecastUSD 11.1bn

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate4.89%US 10-year Treasury (^TNX), 2026-11-02
    Equity risk premium4.23%Damodaran, January 2026
    Beta0.755Reported 0.634, pulled toward 1.0 (Blume)
    Cost of equity8.09%Risk-free + beta x equity risk premium
    Cost of debt5.44%Risk-free + 55bp, the spread for a AA rating at 8.2x interest cover. Book interest / average debt was lower, at 3.1%.
    Market capitalisationUSD 25.2bn79.9% of capital
    Total debtUSD 6.3bn20.1% of capital, book value as a proxy
    Tax rate12.3%Effective, capped at statutory
    WACC7.42%E/V x Re + D/V x Rd x (1 - t)

    Terminal Value

    Perpetuity growth is intrinsic. The exit multiple defaults to the company's current EV/EBITDA, so it answers a different question - what the shares are worth if today's rating holds and EBITDA grows as forecast.

    Perpetuity growth at 2.50%

    Value per shareUSD 219.24

    65% of EV

    Forecast FCFF, final year
    USD 2.0bn
    Capex at depreciation, working capital in reinvestment
    USD 2.1bn
    Less reinvestment at g/ROIC (8.0% of NOPAT)
    USD -169.4m
    Capitalised
    USD 1.9bn
    ROIC (reported)
    31.2%
    Terminal value, undiscounted
    USD 40.5bn
    Terminal value, discounted
    USD 20.5bn
    Enterprise value
    USD 31.6bn
    Less net debt
    USD 6.1bn
    Equity value
    USD 25.5bn

    Exit at 14.4x EBITDA

    Value per shareUSD 243.34

    68% of EV

    Terminal value, undiscounted
    USD 46.0bn
    Terminal value, discounted
    USD 23.3bn
    Enterprise value
    USD 34.4bn
    Less net debt
    USD 6.1bn
    Equity value
    USD 28.3bn

    Spread between methods: 10%.

    Sensitivity

    Value per share (USD) by discount rate and long-run growth.

    Long-run growth
    Discount rate1.50%2.00%2.50%3.00%3.50%
    5.42%325.12360.07407.24474.20576.36
    6.42%246.61265.43289.23320.19361.99
    7.42%194.74205.80219.24235.88256.93
    8.42%157.95164.82172.96182.71194.57
    9.42%130.54134.96140.10146.13153.28

    Outlined: this model. Green text: above today's price of 222.83. Shading: distance from this model's own value.

    Priced In

    What each input would have to be to justify the current price, one at a time.

    InputActualModelImplied
    Revenue growth, a year8.0%4.2%4.4%
    EBIT margin12.2%11.9%12.0%
    Discount rate-7.4%7.4%
    Download as Excel

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    Yahoo Finance and RBA data. General information, not advice. Methodology.