Arcos Dorados Holdings Inc. (NYSE:ARCO) Sees Large Drop in Short Interest

Key Points

• Short interest in Arcos Dorados fell 52.7% to 3.49 million shares as of July 15, representing 1.7% of shares outstanding and a short-interest ratio of 2.0 days.
• Analyst sentiment is broadly positive: the stock has an average “Buy” rating and a consensus price target of $10.50, with JPMorgan upgrading it to “overweight.” Institutional investors own 55.91% of the company.
• Arcos Dorados shares recently traded at $8.43, while the company’s latest quarterly results beat expectations with $0.17 in EPS and $1.22 billion in revenue, up 12.9% year over year.

Arcos Dorados Holdings Inc. (NYSE:ARCO - Get Free Report) was the recipient of a significant drop in short interest during the month of July. As of July 15th, there was short interest totaling 3,486,026 shares, a drop of 52.7% from the June 30th total of 7,367,249 shares. Currently, 1.7% of the shares of the company are short sold. Based on an average trading volume of 1,748,910 shares, the short-interest ratio is presently 2.0 days.

Hedge Funds Weigh In On Arcos Dorados

Several institutional investors have recently made changes to their positions in ARCO. FNY Investment Advisers LLC bought a new stake in Arcos Dorados in the 2nd quarter valued at about $40,000. Global Retirement Partners LLC boosted its holdings in Arcos Dorados by 9,074.6% in the fourth quarter. Global Retirement Partners LLC now owns 5,780 shares of the restaurant operator's stock worth $42,000 after acquiring an additional 5,717 shares in the last quarter. Quarry LP acquired a new stake in Arcos Dorados in the third quarter valued at approximately $45,000. Aquatic Capital Management LLC acquired a new stake in Arcos Dorados in the third quarter valued at approximately $53,000. Finally, Truist Financial Corp bought a new stake in shares of Arcos Dorados during the fourth quarter valued at approximately $76,000. Institutional investors and hedge funds own 55.91% of the company's stock.

Analyst Ratings Changes

A number of research firms have recently weighed in on ARCO. Weiss Ratings downgraded Arcos Dorados from a "hold (c+)" rating to a "hold (c)" rating in a report on Monday, June 29th. JPMorgan Chase & Co. raised Arcos Dorados from a "neutral" rating to an "overweight" rating and raised their price objective for the company from $9.00 to $10.50 in a research note on Friday, July 17th. Zacks Research upgraded Arcos Dorados from a "hold" rating to a "strong-buy" rating in a research note on Friday, July 10th. The Goldman Sachs Group reiterated a "buy" rating on shares of Arcos Dorados in a research report on Wednesday, April 8th. Finally, Santander raised Arcos Dorados to an "outperform" rating in a research note on Monday, April 20th. One equities research analyst has rated the stock with a Strong Buy rating, three have assigned a Buy rating and one has issued a Hold rating to the company's stock. Based on data from MarketBeat.com, the stock currently has an average rating of "Buy" and a consensus target price of $10.50.

Arcos Dorados Trading Up 1.5%

Shares of Arcos Dorados stock traded up $0.12 on Tuesday, reaching $8.43. 909,418 shares of the company's stock were exchanged, compared to its average volume of 1,336,972. The company has a market capitalization of $1.77 billion, a P/E ratio of 7.59 and a beta of 0.48. Arcos Dorados has a 52 week low of $6.51 and a 52 week high of $9.75. The firm's 50-day moving average is $8.42 and its two-hundred day moving average is $8.37. The company has a debt-to-equity ratio of 1.25, a quick ratio of 0.73 and a current ratio of 0.80.

Arcos Dorados (NYSE:ARCO - Get Free Report) last released its quarterly earnings data on Thursday, May 21st. The restaurant operator reported $0.17 earnings per share for the quarter, beating the consensus estimate of $0.11 by $0.06. Arcos Dorados had a net margin of 4.86% and a return on equity of 10.47%. The company had revenue of $1.22 billion during the quarter, compared to analyst estimates of $1.21 billion. During the same quarter in the previous year, the business posted $0.07 EPS. Arcos Dorados's revenue for the quarter was up 12.9% compared to the same quarter last year. Sell-side analysts predict that Arcos Dorados will post 0.76 EPS for the current fiscal year.

About Arcos Dorados

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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