UPDATE: BMO Capital Markets Initiates Coverage On Darden Restaurants

In a note dated October 9, BMO analyst Andrew Strelzik initiated coverage of Darden Restaurants, Inc. (NYSE: DRI) at Market Perform with a $52 price target.

Strelzik commented, "We believe DRI's long-term earnings potential will be determined largely by its ability to drive a turnaround at Olive Garden."

He added, "The likely long timeline required for a turnaround in Olive Garden trends likely will pressure earnings toward the low end of Darden's FY2015 guidance, and we would not be surprised if Darden were to fall short of its expectations."

On the other hand, Strelzik is optimistic about the performance of Darden's LongHorn and Specialty Restaurant Group. He believes these businesses should continue to generate "solid" growth.

Looking ahead, Strelzik is forecasting an EPS of $2.23 and $2.47, respectively, for 2015 and 2016.