Darden Restaurants (DRI) is closing its remaining 28 Bahama Breeze locations, with 14 set to shut permanently and 14 to be converted to other company brands, sharpening attention on its portfolio choices.

The Bahama Breeze exits come after a 19.68% 90 day share price return and a 12.30% year to date share price return. The 1 year total shareholder return of 11.53% and 5 year total shareholder return of 91.78% point to momentum that has been built over several years despite a recent 3.56% 1 day share price decline, with markets now reassessing how this portfolio reshuffle might affect future growth and risk.

If this restaurant reshaping has you thinking about where else capital could work, it might be a good moment to scan 23 top founder-led companies as another source of potential ideas.

With Darden shares up 19.68% over 90 days and trading at a modest 5.76% discount to the average analyst price target, plus an indicated 11.79% intrinsic discount, an important question arises: is there still a genuine opportunity here, or is the market already pricing in future growth?

Most Popular Narrative: 5.5% Undervalued

With Darden Restaurants last closing at $210.24 against a narrative fair value of about $222.38, the most followed storyline in the market centers on modest undervaluation built on disciplined growth and profitability assumptions.

Darden is testing new smaller prototypes for some brands, such as Yard House and Cheddar's Scratch Kitchen. These prototypes lower construction costs and expedite new restaurant openings, enabling a potential acceleration in unit growth which should enhance revenue and earnings.

Curious what kind of revenue run rate and margin profile that growth engine is built on, and how it ties to a richer future earnings multiple? The narrative leans on a steady climb in profitability, higher earnings power, and a premium valuation relative to the broader hospitality group, all pulled together using a specific discount rate that quietly does a lot of the heavy lifting.

Result: Fair Value of $222.38 (UNDERVALUED)

However, you still need to weigh softer guest counts across casual dining and potential consumer spending pressure, which could limit revenue growth and compress already high margin expectations.

Build Your Own Darden Restaurants Narrative

If you see the numbers differently or want to stress test your own assumptions against the market view, you can build a custom narrative in just a few minutes and Do it your way.

A great starting point for your Darden Restaurants research is our analysis highlighting 4 key rewards and 3 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.