Arcos Dorados (NYSE:ARCO) Sets New 12-Month Low - Should You Sell?

Key Points

• Arcos Dorados' stock has reached a new 52-week low of $6.66 as analysts predict challenges ahead, with the share price recently trading at $6.67.
• JPMorgan Chase & Co. downgraded Arcos Dorados from an "overweight" to a "neutral" rating and lowered its price target from $10.50 to $8.80.
• Despite a slight revenue increase to $1.08 billion, the company reported a loss per share of $0.07 for the quarter, missing estimates by $0.06.

Arcos Dorados Holdings Inc. (NYSE:ARCO - Get Free Report)'s stock price hit a new 52-week low during trading on Thursday . The stock traded as low as $6.66 and last traded at $6.67, with a volume of 775129 shares changing hands. The stock had previously closed at $6.84.

Analyst Upgrades and Downgrades

Separately, JPMorgan Chase & Co. downgraded shares of Arcos Dorados from an "overweight" rating to a "neutral" rating and cut their price target for the company from $10.50 to $8.80 in a report on Wednesday, July 2nd.

Arcos Dorados Price Performance

The company has a current ratio of 0.86, a quick ratio of 0.81 and a debt-to-equity ratio of 1.80. The company has a market capitalization of $1.40 billion, a P/E ratio of 10.21 and a beta of 0.59. The business's fifty day moving average price is $7.46 and its 200-day moving average price is $7.66.

Arcos Dorados (NYSE:ARCO - Get Free Report) last posted its quarterly earnings data on Wednesday, May 14th. The restaurant operator reported $0.07 earnings per share (EPS) for the quarter, missing analysts' consensus estimates of $0.13 by ($0.06). Arcos Dorados had a return on equity of 26.70% and a net margin of 3.00%. The company had revenue of $1.08 billion for the quarter, compared to the consensus estimate of $1.02 billion. During the same period in the prior year, the firm posted $0.14 earnings per share. The business's revenue was down .4% on a year-over-year basis. As a group, sell-side analysts predict that Arcos Dorados Holdings Inc. will post 0.63 earnings per share for the current fiscal year.

Arcos Dorados Cuts Dividend

The business also recently disclosed a dividend, which was paid on Friday, June 27th. Stockholders of record on Wednesday, June 25th were issued a dividend of $0.06 per share. This represents a dividend yield of 313.0%. The ex-dividend date of this dividend was Tuesday, June 24th. Arcos Dorados's payout ratio is currently 36.92%.

Institutional Trading of Arcos Dorados

A number of hedge funds have recently made changes to their positions in the stock. Itau Unibanco Holding S.A. purchased a new position in shares of Arcos Dorados during the first quarter valued at about $73,000. R Squared Ltd grew its holdings in shares of Arcos Dorados by 60.3% during the first quarter. R Squared Ltd now owns 11,800 shares of the restaurant operator's stock valued at $95,000 after buying an additional 4,440 shares during the last quarter. Mraz Amerine & Associates Inc. purchased a new stake in shares of Arcos Dorados during the second quarter valued at approximately $120,000. Boothbay Fund Management LLC grew its holdings in shares of Arcos Dorados by 27.0% during the fourth quarter. Boothbay Fund Management LLC now owns 19,761 shares of the restaurant operator's stock valued at $144,000 after buying an additional 4,201 shares during the last quarter. Finally, Janus Henderson Group PLC purchased a new stake in shares of Arcos Dorados during the fourth quarter valued at approximately $146,000. 55.91% of the stock is owned by institutional investors.

Arcos Dorados Company Profile

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.