Short Interest in Arcos Dorados Holdings Inc. (NYSE:ARCO) Decreases By 22.9%

Key Points

• Short interest in Arcos Dorados declined by 22.9%, totaling 3,460,000 shares as of August 15th, indicating less bearish sentiment among investors.
• JPMorgan Chase & Co. has downgraded Arcos Dorados from an "overweight" rating to "neutral," reducing its price target from $10.50 to $8.80.
• Arcos Dorados reported earnings of $0.11 per share for the last quarter, exceeding the consensus estimate of $0.05; however, its revenue fell short of expectations at $1.14 billion.

Arcos Dorados Holdings Inc. (NYSE:ARCO - Get Free Report) was the recipient of a large drop in short interest in August. As of August 15th, there was short interest totaling 3,460,000 shares, a drop of 22.9% from the July 31st total of 4,490,000 shares. Based on an average trading volume of 1,450,000 shares, the days-to-cover ratio is presently 2.4 days. Currently, 2.9% of the company's stock are short sold. Currently, 2.9% of the company's stock are short sold. Based on an average trading volume of 1,450,000 shares, the days-to-cover ratio is presently 2.4 days.

Analysts Set New Price Targets

A number of research firms have commented on ARCO. Wall Street Zen upgraded shares of Arcos Dorados from a "hold" rating to a "buy" rating in a research note on Saturday. JPMorgan Chase & Co. lowered shares of Arcos Dorados from an "overweight" rating to a "neutral" rating and dropped their price objective for the company from $10.50 to $8.80 in a research note on Wednesday, July 2nd. One research analyst has rated the stock with a Hold rating, According to data from MarketBeat.com, the stock currently has an average rating of "Hold" and a consensus price target of $8.80.

Institutional Trading of Arcos Dorados

A number of institutional investors have recently added to or reduced their stakes in ARCO. Lazard Asset Management LLC purchased a new stake in Arcos Dorados during the second quarter worth about $117,349,000. Nuveen LLC purchased a new stake in Arcos Dorados during the first quarter worth about $79,583,000. Pzena Investment Management LLC purchased a new stake in shares of Arcos Dorados in the second quarter valued at about $51,549,000. Fourth Sail Capital LP purchased a new stake in shares of Arcos Dorados in the first quarter valued at about $26,746,000. Finally, Brightlight Capital Management LP purchased a new stake in shares of Arcos Dorados in the second quarter valued at about $14,972,000. Hedge funds and other institutional investors own 55.91% of the company's stock.

Arcos Dorados Stock Performance

Shares of Arcos Dorados stock traded down $0.25 on Friday, reaching $6.80. 1,764,520 shares of the stock were exchanged, compared to its average volume of 1,177,414. Arcos Dorados has a 1-year low of $6.51 and a 1-year high of $10.27. The company has a current ratio of 0.80, a quick ratio of 0.73 and a debt-to-equity ratio of 1.62. The business has a fifty day moving average price of $7.10 and a two-hundred day moving average price of $7.47. The firm has a market capitalization of $1.43 billion, a PE ratio of 10.79, a PEG ratio of 1.37 and a beta of 0.63.

Arcos Dorados (NYSE:ARCO - Get Free Report) last issued its quarterly earnings results on Wednesday, August 13th. The restaurant operator reported $0.11 earnings per share (EPS) for the quarter, topping analysts' consensus estimates of $0.05 by $0.06. The business had revenue of $1.14 billion for the quarter, compared to analyst estimates of $1.22 billion. Arcos Dorados had a net margin of 2.89% and a return on equity of 24.54%. The business's revenue was up 2.8% compared to the same quarter last year. During the same period in the previous year, the business posted $0.13 earnings per share. As a group, research analysts anticipate that Arcos Dorados will post 0.63 earnings per share for the current fiscal year.

About Arcos Dorados

Arcos Dorados Holdings Inc operates as a franchisee of McDonald's restaurants. It has the exclusive right to own, operate, and grant franchises of McDonald's restaurants in 20 countries and territories in Latin America and the Caribbean, including Argentina, Aruba, Brazil, Chile, Colombia, Costa Rica, Curacao, Ecuador, French Guiana, Guadeloupe, Martinique, Mexico, Panama, Peru, Puerto Rico, Trinidad and Tobago, Uruguay, the U.S.