Darden Restaurants (DRI) has a "solid" setup heading into Q4 results, with fiscal 2027 guidance likely to start cautiously before stronger sales, better pricing and cost trends, and margin flexibility supporting potential positive revisions in 2027, Oppenheimer said in a note Thursday.

The company is set to report fiscal Q4 results on June 25.

Oppenheimer expects Darden to report Q4 earnings above the Street estimate. It said recent trends are likely to ease concerns around tougher comparisons in fiscal 2027.

The firm sees initial fiscal 2027 EPS guidance of $11.30 to $11.50, versus the Street's $11.39. It said that leaves room for upside if trends hold. It also said the Street's 2.8% same-store sales forecast for fiscal 2027 could prove conservative.

Darden's price and inflation balance is expected to improve after pressuring fiscal 2026 results, giving management more room to expand margins in fiscal 2027, according to the note.

Oppenheimer raised its fiscal 2026 and 2027 EPS estimates slightly and introduced fiscal 2028 EPS of $12.61.

The firm kept its outperform rating, with a $235 price target.

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