Darden Restaurants (DRI) is set for an earnings upside cycle through fiscal 2026 based on its "unique sales levers" and "solid" earnings before interest and taxes margin setup, Oppenheimer said in a note Wednesday.

Analysts said the company will likely issue a conservative fiscal 2026 guidance Friday, with earnings per share and same store sales growth estimates expected to be in line with consensus.

"We anticipate [fiscal 2026] to represent a potential 'beat-and-raise year underpinned by operational catalysts for sales/margins," Oppenheimer analysts said in the note.

The company's Olive Garden segment could be the largest swing factor at approximately 43% of sales, Oppenheimer said. The segment is "well-positioned" to surpass the Street's expectations in same-store sales for fiscal 2026 as delivery momentum builds, along with more aggressive marketing strategies, according to the note.

Oppenheimer raised its price target on the stock to $250 from $230 and maintained an outperform rating, while reiterating Darden Restaurants among its top picks.

Price: 224.06, Change: -0.72, Percent Change: -0.32