Darden Restaurants Inc (DRI) is fairly valued and Yum China Holdings Inc (YUMC) is undervalued.
Against our estimates of intrinsic value, YUMC trades at the wider discount: a margin of safety of +23%, against +3% for DRI.
Values as of the 22 Sept 2026 close.
Discounting its cash flows at 8.5% (average of 3 methods) values the shares at $219.43; the price of $213.54 is 3% below that value, and 78% of that value comes from beyond year five.
Leak Score 59/100 on 9 of 12 signals
Discounting its cash flows at 8.7% (average of 3 methods) values the shares at $54.25; the price of $41.58 is 23% below that value, and 77% of that value comes from beyond year five.
Leak Score 100/100 on 3 of 12 signals
| Metric | DRI | YUMC |
|---|---|---|
| Verdict | Fairly valued | Undervalued |
| Price | $213.54 | $41.58 |
| Intrinsic value | $219.43 | $54.25 |
| Margin of safety | +3% | +23% |
| Leak Score | 59/100 (9/12) | 100/100 (3/12) |
| Market cap | $24.2B | $14.2B |
| Revenue growth, 5 years | 12.9% | 7.4% |
| Operating margin | 12.2% | 12.5% |
| Net margin | 9.1% | 7.8% |
| Return on equity | 53.7% | 17.5% |
| Debt to equity | 3.63 | 0.43 |
| P/E | 20.6x | 15.3x |
| Forward P/E | 17.2x | 12.4x |
| P/B | 11.0x | 2.7x |
| Dividend yield | 3.1% | 2.7% |