By Dhirendra Tripathi

Investing.com – Darden Restaurants stock (NYSE:) traded 1.9% higher Wednesday after Stifel said that Gene Lee’s successor Rick Cardenas has greatly influenced the fine-dining chain’s direction in recent years and will continue the strategic growth path the outgoing CEO led it on.

Analyst Chris O’Cull upgraded the stock to ‘buy’ with a target of $165, over 13% higher than the current price of $145.40.

Lee has been the CEO for the past seven years. Cardenas will take over in May. However, he will continue to be chairman. Cardenas is currently the company’s President and Chief Operating Officer.

It was presented with the second-quarter results and the succession plan by Stifel on December 17. The stock lost 5% that day; Stifel believes the fall wasn’t warranted given that the recent numbers were strong. The brokerage said Friday’s decline in the stock price might have been due to the announcement of the CEO’s departure. O’Cull reported that “we are confident that investors will soon realize Rick Cardenas can continue to lead the company along a similar strategy growth path.”

Darden continued to post solid results and the company has the potential to surpass peers in an extremely challenging operating environment. Although we acknowledge that there is a potential for variant-related sales disruptions, the shares are trading at around 17x our FY23 earnings estimate. This makes it an attractive entry point into a quality company. 

Darden shares have risen 22% over the previous year, as of today’s trade.