Arcos Dorados (NYSE:ARCO) Rating Lowered to Hold at Zacks Research

Key Points

• Zacks Research downgraded Arcos Dorados from “strong buy” to “hold,” though the broader analyst consensus remains “Moderate Buy” with an average price target of $10.50.
• ARCO shares opened at $7.91, down 2%, and remain below their 50-day and 200-day moving averages. The stock has traded between $6.54 and $9.75 over the past year.
• The company exceeded quarterly expectations, reporting earnings of $0.17 per share versus estimates of $0.11 and revenue of $1.22 billion, up 12.9% year over year. Institutional investors own approximately 55.91% of the stock.

Arcos Dorados (NYSE:ARCO - Get Free Report) was downgraded by Zacks Research from a "strong-buy" rating to a "hold" rating in a report issued on Monday,Zacks.com reports.

A number of other brokerages have also weighed in on ARCO. Wall Street Zen upgraded Arcos Dorados from a "hold" rating to a "buy" rating in a research note on Saturday, May 23rd. Weiss Ratings downgraded Arcos Dorados from a "hold (c+)" rating to a "hold (c)" rating in a research report on Monday, June 29th. Santander upgraded Arcos Dorados to an "outperform" rating in a research report on Monday, April 20th. Finally, JPMorgan Chase & Co. raised Arcos Dorados from a "neutral" rating to an "overweight" rating and boosted their price objective for the stock from $9.00 to $10.50 in a report on Friday, July 17th. Three equities research analysts have rated the stock with a Buy rating and two have assigned a Hold rating to the company's stock. According to data from MarketBeat.com, Arcos Dorados currently has a consensus rating of "Moderate Buy" and an average price target of $10.50.

Arcos Dorados Stock Down 2.0%

ARCO opened at $7.91 on Monday. The company has a fifty day moving average price of $8.30 and a 200-day moving average price of $8.42. The firm has a market capitalization of $1.67 billion, a P/E ratio of 7.12 and a beta of 0.48. The company has a debt-to-equity ratio of 1.25, a current ratio of 0.80 and a quick ratio of 0.73. Arcos Dorados has a one year low of $6.54 and a one year high of $9.75.

Arcos Dorados (NYSE:ARCO - Get Free Report) last released its quarterly earnings results on Thursday, May 21st. The restaurant operator reported $0.17 earnings per share for the quarter, topping the consensus estimate of $0.11 by $0.06. The firm had revenue of $1.22 billion for the quarter, compared to analysts' expectations of $1.21 billion. Arcos Dorados had a net margin of 4.86% and a return on equity of 10.47%. The business's quarterly revenue was up 12.9% on a year-over-year basis. During the same quarter in the prior year, the firm posted $0.07 earnings per share. Equities research analysts expect that Arcos Dorados will post 0.76 earnings per share for the current fiscal year.

Institutional Inflows and Outflows

Several hedge funds and other institutional investors have recently added to or reduced their stakes in the stock. Lazard Asset Management LLC lifted its stake in 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 purchasing an additional 1,703,169 shares during the last quarter. Pzena Investment Management LLC increased its position in shares of Arcos Dorados by 1.7% during the 1st quarter. Pzena Investment Management LLC now owns 10,741,166 shares of the restaurant operator's stock valued at $88,615,000 after purchasing an additional 178,602 shares during the last quarter. Moerus Capital Management LLC increased its position in shares of Arcos Dorados by 19.9% during the 1st quarter. Moerus Capital Management LLC now owns 4,263,589 shares of the restaurant operator's stock valued at $35,175,000 after purchasing an additional 706,683 shares during the last quarter. Hussman Strategic Advisors Inc. bought a new position in shares of Arcos Dorados during the 4th quarter valued at about $771,000. Finally, Dumac Inc. bought a new stake in Arcos Dorados in the 4th quarter worth approximately $447,000. 55.91% of the stock is currently owned by hedge funds and other institutional investors.

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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