Darden Restaurants (DRI) Price Forecast 2026: LongHorn +9.5% vs Olive Garden Miss - Buy the Dip?

The key data points are LongHorn’s 9.5% same-restaurant sales growth in Q4, which beat analysts’ 7.1% consensus by 240 basis points, making it arguably the best performing single brand in the full-service casual dining category so far this year. Darden’s CEO, Ricardo Cardenas, credited it to a viral social media campaign, and the continued execution of LongHorn’s “steak-focused value” strategy. What’s particularly heartening about LongHorn’s Q4 growth is that guest count also increased, along with the check; that’s the only way you should want to see sales grow.

Darden has stated that guests are now choosing LongHorn on quality versus price, a dual-metric validation of that theory. For full year 2026 fiscal year sales growth, LongHorn grew same-restaurant sales by 7.2%. LongHorn has been the growth story for the full year in the Darden portfolio, and is probably the only good excuse to keep the bullish bulls on board this stock.

On the other hand, Olive Garden’s 2.4% same-restaurant sales growth compared to the 3.2% analyst estimate is the only number that mattered in the context of Darden’s Q4 stock price sell-off. 

Full year 2026 fiscal year sales growth for Olive Garden came in at 4.0% same-restaurant sales growth, which is pretty impressive all on its own. But the Q4 deceleration of to 2.4% same-restaurant sales growth does give an idea of what fiscal 2027 might look like. Fiscal 2027 full-year same-restaurant sales growth guidance of 2.5% to 3.5% for blended same-restaurant sales implies a further dip.

A total sales run rate exceeding $13 billion. An 8% increase in the quarterly dividend. And authorization of a $1.5 billion stock buyback. What Darden accomplished in 2026 to set a new revenue and earnings record is the key takeaway for investors.

FY2026 revenues reached a record $13.21 billion, while full-year adjusted EPS of $10.64 rose 11.4% year-over-year. In one of its simultaneous announcements today regarding capital return, Darden raised its quarterly dividend by 8% to $1.62 per share. The Board of Directors also approved the authorization of a stock repurchase program for up to $1.5 billion of company shares. 

In the fourth quarter of 2026, Darden returned a total of $310 million in capital to investors. It’s more meaningful to income-focused investors than Darden is raising the quarterly dividend as its annual indication that it’s on track with its free cash flow generation, that the dividend is sustainable. 

The buyback authorization at the current price of $204 per share represents approximately 4.5% of its market capitalization, and provides Darden with some meaningful buy-side optionality to reduce the share count from its stock price below the 218 price resistance zone.

2027 guidance of $13.60 to $13.75 billion in revenue, adjusted EPS between $11.10 and $11.35 was below expectations for full-year revenues and the consensus for fiscal 2027 earnings at $11.40, which still represents 4.3% to 6.7% in revenue growth and 4.3% to 6.7% in earnings growth, from a record 2026 run rate. Management is guiding 75 to 80 new restaurant openings in 2027, including 11 Bahama Breeze conversions to other concepts after closing the last 15 under-performing Bahama Breeze locations in fiscal 2026. 

Beef inflation is the primary cost headwind, which is guided to mid-to-high single digits in 2027’s first quarter and deflation in 2027’s second quarter to net to a low single-digit beef price inflation for 2027. On 2027 consumer demand, CFO Raj Vennam stated during the earnings call, “We’re not expecting any material change in the industry’s performance.” It’s a bit conservative, which means management can be pleasantly surprised if consumers are stronger in the next 90 to 120 days.

Darden (DRI) held its ascending trendline on the second-half of the chart after repeated rejections in the declining channel from its 218-highs last year with the relative strength index at 44.57.

Darden Restaurants (DRI) Price Chart - Source: Tradingview

The reading at neutral is below 50, with room to climb up to and past that mark without a strong divergence above the index level and resistance at 212.32 to 218.63. 

Technically, a breakout  of 212.30 and hold above that level is likely to target a trendline bounce at around 218.60 level. Whereas, a breakdown and hold below 196.10 would open a pullback to 191.44.

• Entry: Long above $212.30 after overcoming resistance on the descending channel.
• Target: The trendline bounce at $218.60.
• Stop: Below $196.10 as a breakdown below the trendline.

Q4 same-restaurant sales were 9.5% at LongHorn (above 7.1% analyst estimates), buoyed by a social media campaign and its value proposition (steaks at a fair price). Same-restaurant guest count grew alongside average check per guest, confirming that sales growth was not a result of discounts. Olive Garden same-restaurant sales grew 2.4% in Q4, hampered by a weak trend among under 35 diners and the change to a “lighter plate” menu. FY2026 same-restaurant sales were 7.2% at LongHorn vs 4.0% at Olive Garden, meaning LongHorn will likely be the portfolio’s growth driver in FY2027.

The technicals are looking good. Darden is bouncing off the ascending trendline at $204 (RSI at 44.57) and it could move higher. A close back above $212.30 suggests a move toward $218.60 with the stop level at $196.10. The bulls will say Darden raised its dividend 8% (now $1.62 per quarter), approved a new $1.5 billion buyback and hit $13 billion in revenue for the first time in the company’s history. LongHorn’s 9.5% Q4 same-restaurant sales also is encouraging. The bear case will say: Olive Garden’s soft same-restaurant traffic trend among under 35 diners, beef inflation in Q1 FY2027, and below-consensus FY2027 guidance. As always, CFO Vennam’s “no material change to industry performance” is a very conservative comment.

Darden (DRI) is at $204.16 defending its ascending trendline after a mixed Q4 with LongHorn delivering 9.5% same-restaurant sales growth (240bps above estimates) and Olive Garden coming in at 2.4% (missing the estimates). The company did deliver $13 billion in annual revenue for the first time ever and raised the quarterly dividend 8% to $1.62 after also approving a new $1.5 billion buyback. The bears cite concerns over below-consensus FY2027 guidance and Olive Garden’s soft trend with under 35 diners. RSI is at 44 (neutral) with room to grow. Above $212.30 and the targets is $218.60. The stop level is at $196.10.