Using the PEG framework with analyst consensus forward EPS growth of 15.0% plus 2.8% dividend yield, Darden Restaurants, Inc. has a fair value of $159.58 based on NTM EPS (FY2026) of $10.62. The current PEG ratio is 1.25.
PEG < 1 = bargain, 1–1.5 = fair, > 2 = expensive.
PEG works well for steady growers with predictable earnings.
| EPS Growth RateForward | 12.2% |
| Dividend Yield | +2.8% |
| Adjusted Growth (clamped 8–25%) | 15.0% |
| Fair P/E | 15.0x |
| NTM EPS (FY2026) | $10.62 |
| Fair Value | $159.58 |
| Period | EPS Est. | Growth | Analysts |
|---|---|---|---|
| FY2025 (actual) | $8.86 | — | — |
| FY2026E | $10.62 | +19.9% | 21 |
| FY2027E | $11.38 | +7.1% | 21 |
| FY2028E | $12.51 | +9.9% | 17 |
| FY2029E | $14.18 | +13.3% | 8 |
| FY2030E | $15.74 | +11.1% | 9 |
5Y Forward EPS CAGR: 12.2%
| Year | Net Income | EPS | YoY |
|---|---|---|---|
| FY2021 | $629.3M | $4.77 | — |
| FY2022 | $952.8M | $7.39 | +54.9% |
| FY2023 | $981.9M | $7.99 | +8.1% |
| FY2024 | $1.0B | $8.51 | +6.5% |
| FY2025 | $1.0B | $8.86 | +4.1% |
4Y Historical EPS CAGR: 16.7%
The PEG Fair Value uses the Price/Earnings-to-Growth framework. A stock is fairly valued when its P/E ratio equals its earnings growth rate (PEG = 1.0). This model adds dividend yield to the growth rate per the original PEGY formula.
Growth rate priority: analyst consensus forward EPS CAGR (when ≥ 3 analysts cover the stock), falling back to historical EPS CAGR. Using EPS rather than net income avoids distortion from share buybacks. The growth rate is clamped between 8% and 25% — below 8% would undervalue stable earners, while above 25% would overvalue unsustainable spikes.