J.P. Morgan upgraded Darden Restaurants (DRI ) to overweight from neutral.
Analyst John Ivankoe says he thinks the full-service restaurant industry will continue to outperform quick service in the first half of 2003. He notes the casual dining industry has a favorable lifestyle and demographic secular comps that are matched with recent solid trends during a difficult economic cycle. With Darden shares trading at about 11.1 times his $1.51 calendar 2003 earnings per share estimate relative to its average of 16, he believes earnings per share expectations will be supported by currently modest sales forecasts and favorable seafood cost exposure. Darden operates 1,200 restaurants in the U.S. and Canada including Red Lobster and Olive Garden.