Darden Restaurants, Inc. (DRI) DCF Valuation
TGM's two-stage DCF values Darden Restaurants, Inc. (DRI) between $178.67 and $365.71 depending on assumptions, with a base case of $250.65. Growth is taken from the company's own record (5-year revenue CAGR (FCF growth too volatile to use)), fading to 2.5% long-run; the discount rate (7.5%) reflects its beta.
What would today's price require?
$213.45 is justified only if free cash flow grows about +9.2% a year (fading to 2.5% long-run) at a 7.5% required return — slower than the company has actually grown.
| Scenario | FCF growth (fading to 2.5%) | Discount | Value / share |
|---|---|---|---|
| Conservative | 9.8%/yr | 8.5% | $178.67 |
| Base case | 12.8%/yr | 7.5% | $250.65 |
| Optimistic | 15.8%/yr | 6.5% | $365.71 |
| Analyst DCF (FMP) | independent reference — different model | $208.31 | |
Current Price
$213.45
Market-Implied Growth
+9.2%/yr
vs +12.8% 5Y actual
Model Scenario Range
$178.67 – $365.71
model output — not a price target
DRI DCF Fair Value Calculator
Edit the assumptions to see how they change the estimated fair value. Opens seeded with TGM's data-driven base case for DRI (growth from its own 5-year record, discount from its beta), so the sandbox starts where the scenarios above leave off. Illustrative model — not investment advice.
Base inputs: FCF $967.7M · 0.11B shares · net debt $1.9B
Estimated Fair Value
$374.57
+75.5% vs $213.45
Sensitivity — fair value by discount rate × terminal growth
How the estimated fair value shifts with the discount rate (WACC) and terminal growth, holding your 12.8%/yr FCF growth and 10-year horizon fixed. Green = above today's $213.45; red = below. Your current case is outlined.
| WACC ↓ / Terminal → | 1.50% | 2.00% | 2.50% | 3.00% | 3.50% |
|---|---|---|---|---|---|
| 5.5% | $526 | $588 | $671 | $787 | $961 |
| 6.5% | $405 | $441 | $485 | $542 | $619 |
| 7.5% | $326 | $348 | $375 | $407 | $448 |
| 8.5% | $269 | $284 | $301 | $322 | $346 |
| 9.5% | $227 | $238 | $249 | $263 | $279 |
About Darden Restaurants, Inc.
Darden Restaurants, Inc., through its various subsidiaries, focuses on the ownership and operation of full-service dining establishments across both the United States and Canada. As of May 29, 2022, the company's extensive portfolio comprised 1,867 directly managed restaurants. These included a significant presence from its flagship brands: 884 Olive Garden outlets, 546 LongHorn Steakhouse locations, 172 Cheddar's Scratch Kitchens, 85 Yard House venues, 62 Capital Grille branches, 45 Seasons 52 restaurants, 42 Bahama Breeze sites, 28 Eddie V's Prime Seafood establishments, and 3 Capital Burger eateries. In addition to its owned operations, Darden also oversees 60 franchised restaurants, specifically 35 Olive Garden units, 18 LongHorn Steakhouse units, 4 Cheddar's Scratch Kitchens, 2 Capital Grille locations, and 1 Bahama Breeze restaurant. The company, which originated in 1968, is headquartered in Orlando, Florida.
- Sector
- Consumer Cyclical
- Industry
- Restaurants
- CEO
- Ricardo Cardenas