Darden Restaurants (NYSE:DRI) Comps At Low End of Range

Even though comps are coming in at the low end of the former range, it appears in the first half Darden Restaurants (NYSE:DRI) EPS could enjoy some upside.

Barclays (NYSE:BCS) said, "F11 EPS growth guidance was reiterated though comps are now at the low end of the prior range... not pleasing for a comp driven investor who invests in Darden for their strong industry comp outperformance. Yet with 1H EPS ahead of plan despite comps behind, it's possible to still see EPS upside in F11. While we continue to believe casual dining is best positioned for outperformance into 2011, and Darden still offers the best fundamentals, we expect stock price outperformance will be more tempered near term...Darden shares (& most of their peers) were at 52-week highs, and we believe justifiably so. We're therefore not surprised by today's weakness. At 13.5x vs the 6-15x 3-year range & 11.5x average, DRI remains cheapest in the segment, despite comp, unit & EPS growth above peers. We're buyers on the weakness."

Barclays maintains an "Overweight" on Darden Restaurants, which closed Wednesday at $47.20, down $0.34, or 0.72 percent. Barclays has a price target of $57 on them.