Darden Restaurants Inc. (DRI) is heading into 2026 without much wind in its sails. After failing to capitalize on significant drivers last year, the casual dining giant now faces what Truist Securities calls "a lack of incremental sales drivers" for the year ahead.

The Downgrade

Analyst Jake Bartlett downgraded Darden from Buy to Hold and slashed the price target from $240 to $207. That's not exactly a vote of confidence.

What Went Wrong at Olive Garden?

Here's the thing about Olive Garden: it's supposed to be the steady performer when times get tough. Historically, the chain has significantly outperformed peers during periods of economic pressure, as budget-conscious diners trade down to its endless breadsticks and predictable pricing.

But that didn't really happen in 2025. The segment's outperformance was surprisingly limited, Bartlett noted. The implication? Olive Garden's everyday value pitch just isn't landing with customers the way it used to.

Margin Squeeze Ahead

Darden's margin outlook isn't much better. Rising commodity costs are eating into profitability, while labor productivity gains are shrinking. That's a rough combination.

In uncertain demand environments like this, Bartlett prefers "self-help stories" where companies can control their own destiny through operational improvements. Darden ranks low on that measure.

Stock Performance

Shares were down 1.01% at $200.45 on Friday. The company maintains a $23.32 billion market cap and trades at a P/E ratio of 21.23. With a 52-week range of $169 to $228.27, the stock sits closer to its high than its low, though the analyst's new price target suggests limited upside from current levels.