Arcos Dorados Holdings Inc. (NYSE:ARCO) Given Consensus Recommendation of "Moderate Buy" by Brokerages

Key Points

• Analyst sentiment is moderately bullish: Three of five analysts rate Arcos Dorados a buy and two recommend holding, with an average 12-month price target of $10.50 versus the stock’s $7.96 price.
• Institutional ownership remains significant: Several investment firms increased their positions, and institutions and hedge funds collectively own 55.91% of the company.
• Recent results exceeded expectations: Arcos Dorados reported quarterly earnings of $0.22 per share, above the $0.15 consensus estimate, while revenue of $1.31 billion also topped forecasts.

Shares of Arcos Dorados Holdings Inc. (NYSE:ARCO - Get Free Report) have earned an average recommendation of "Moderate Buy" from the five analysts that are covering the company, MarketBeat.com reports. Two investment analysts have rated the stock with a hold rating and three have given a buy rating to the company. The average twelve-month target price among brokerages that have issued ratings on the stock in the last year is $10.50.

Several equities analysts recently commented on ARCO shares. JPMorgan Chase & Co. upgraded Arcos Dorados from a "neutral" rating to an "overweight" rating and raised their target price for the stock from $9.00 to $10.50 in a research report on Friday, July 17th. Weiss Ratings cut Arcos Dorados from a "hold (c+)" rating to a "hold (c)" rating in a research report on Monday, June 29th. Wall Street Zen upgraded Arcos Dorados from a "hold" rating to a "buy" rating in a research note on Saturday, May 23rd. Finally, Zacks Research lowered shares of Arcos Dorados from a "strong-buy" rating to a "hold" rating in a research report on Monday, August 10th.

Institutional Inflows and Outflows

Several institutional investors and hedge funds have recently modified their holdings of ARCO. Lazard Asset Management LLC raised its position in shares of Arcos Dorados by 7.9% during the first quarter. Lazard Asset Management LLC now owns 23,174,841 shares of the restaurant operator's stock worth $191,192,000 after acquiring an additional 1,703,169 shares during the last quarter. Pzena Investment Management LLC boosted its holdings in Arcos Dorados by 1.7% in the first quarter. Pzena Investment Management LLC now owns 10,741,166 shares of the restaurant operator's stock valued at $88,615,000 after acquiring an additional 178,602 shares during the last quarter. Moerus Capital Management LLC increased its position in Arcos Dorados by 19.9% in the first quarter. Moerus Capital Management LLC now owns 4,263,589 shares of the restaurant operator's stock worth $35,175,000 after purchasing an additional 706,683 shares during the period. Hussman Strategic Advisors Inc. acquired a new stake in Arcos Dorados in the fourth quarter worth about $771,000. Finally, Dumac Inc. bought a new stake in Arcos Dorados during the 4th quarter worth about $447,000. 55.91% of the stock is owned by institutional investors and hedge funds.

Arcos Dorados Price Performance

NYSE:ARCO opened at $7.96 on Friday. The company has a debt-to-equity ratio of 1.14, a quick ratio of 0.81 and a current ratio of 0.88. The company has a 50-day moving average of $8.22 and a 200-day moving average of $8.41. Arcos Dorados has a 52 week low of $6.54 and a 52 week high of $9.75. The company has a market capitalization of $1.68 billion, a price-to-earnings ratio of 6.52 and a beta of 0.48.

Arcos Dorados (NYSE:ARCO - Get Free Report) last posted its earnings results on Thursday, August 13th. The restaurant operator reported $0.22 earnings per share for the quarter, beating analysts' consensus estimates of $0.15 by $0.07. The business had revenue of $1.31 billion for the quarter, compared to analysts' expectations of $1.28 billion. Arcos Dorados had a net margin of 5.15% and a return on equity of 12.50%. As a group, equities research analysts anticipate that Arcos Dorados will post 0.77 earnings per share for the current fiscal year.

Arcos Dorados Company Profile

Arcos Dorados Holdings Inc is the largest independent McDonald's franchisee in the world, operating under an exclusive license agreement with McDonald's Corporation. The company develops, owns and operates quick-service restaurants, offering the full McDonald's menu, including hamburgers, chicken sandwiches, salads, sides, desserts and McCafé beverages. In addition to restaurant operations, Arcos Dorados manages supply chain logistics, property development, training and support services for its franchise network.

Headquartered in Montevideo, Uruguay, Arcos Dorados serves 20 markets across Latin America and the Caribbean, including Argentina, Brazil, Chile, Colombia, Mexico, Puerto Rico and Uruguay.

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