02:29 PM EDT, 03/13/2024 (MT Newswires) -- Darden Restaurants' ( DRI ) fiscal third-quarter same-store sales may be lower than expected amid soft industry-wide trends in January and February, Oppenheimer said in a note emailed Wednesday.

The brokerage is estimating same-store sales growth of 0.5% for the quarter, below the consensus view of 1.5%. Casual dining same store sales were likely down 2.5% from December through February, excluding Darden, due to tough comparisons and weather impacts in January, Oppenheimer said, citing data from Knapp Track.

Darden outperformed the Knapp Track dataset by 230 basis points in the second quarter, Oppenheimer analysts Brian Bittner and Michael Tamas wrote. The Street's view assumes that the restaurant operator of brands such as Olive Garden ( DRI ) and Longhorn Steakhouse likely outperformed by 400 basis points in the third quarter. That "appears aggressive," according to Bittner and Tamas wrote.

"Our refreshed analysis suggests that softer industry-wide trends" in January and February could drive Darden's third-quarter comparable sales below "stale consensus forecasts," and limit management's ability to raise the full-year earnings per share guidance, they wrote.

Darden's February quarter results are scheduled to be released on March 21. Oppenheimer now sees EPS at $2.58, down from $2.66 previously and below the $2.64 normalized EPS estimate on Capital IQ.

Oppenheimer reiterated an outperform rating and a $186 price target on the stock but lowered its fiscal 2024 EPS estimate to $8.83 from $8.89.

The company will likely keep its 2024 EPS guidance unchanged with an $8.83 midpoint, according to the brokerage. The consensus view is for an EPS of $8.88 for the ongoing year, the report showed.

Further out, the 2025 EPS consensus of $9.72 appears to be "a conservative base-case, particularly if restaurant margins expand against flat Street forecasts," Bittner and Tamas said.

Price: 174.96, Change: +2.64, Percent Change: +1.53