Arcos Dorados (NYSE:ARCO) Shares Pass Above 200-Day Moving Average - Here's Why

Key Points

• Arcos Dorados Holdings Inc. shares have crossed above their 200-day moving average, indicating potential bullish momentum in the stock's performance.
• JPMorgan Chase & Co. has recently downgraded the stock's rating from "overweight" to "neutral" and reduced its target price from $10.50 to $8.80.
• The company reported an earnings per share (EPS) of $0.11 for the last quarter, exceeding expectations despite revenue falling short of estimates at $1.14 billion.

Arcos Dorados Holdings Inc. (NYSE:ARCO - Get Free Report) crossed above its 200-day moving average during trading on Wednesday . The stock has a 200-day moving average of $7.63 and traded as high as $7.64. Arcos Dorados shares last traded at $7.59, with a volume of 5,599,940 shares trading hands.

Analyst Upgrades and Downgrades

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

Arcos Dorados Price Performance

The firm has a fifty day moving average price of $7.38 and a two-hundred day moving average price of $7.63. The stock has a market capitalization of $1.57 billion, a P/E ratio of 11.83, a PEG ratio of 1.44 and a beta of 0.59. The company has a debt-to-equity ratio of 1.62, 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 results on Wednesday, August 13th. The restaurant operator reported $0.11 earnings per share for the quarter, beating the consensus estimate of $0.05 by $0.06. The firm had revenue of $1.14 billion for the quarter, compared to analysts' expectations of $1.22 billion. Arcos Dorados had a return on equity of 24.54% and a net margin of 2.89%. The company's revenue was up 2.8% compared to the same quarter last year. During the same period in the prior year, the firm earned $0.13 EPS. As a group, analysts expect that Arcos Dorados Holdings Inc. will post 0.63 EPS 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 paid a $0.06 dividend. This represents a dividend yield of 313.0%. The ex-dividend date was Tuesday, June 24th. Arcos Dorados's dividend payout ratio is 38.10%.

Institutional Investors Weigh In On Arcos Dorados

Several hedge funds and other institutional investors have recently modified their holdings of the stock. Auxier Asset Management increased its stake in shares of Arcos Dorados by 4.0% in the 2nd quarter. Auxier Asset Management now owns 330,375 shares of the restaurant operator's stock worth $2,607,000 after purchasing an additional 12,582 shares in the last quarter. Lazard Asset Management LLC purchased a new stake in Arcos Dorados in the 2nd quarter worth $117,349,000. Brightlight Capital Management LP purchased a new stake in Arcos Dorados in the 2nd quarter worth $14,972,000. Bank of America Corp DE increased its stake in Arcos Dorados by 50.5% in the 2nd quarter. Bank of America Corp DE now owns 976,749 shares of the restaurant operator's stock worth $7,707,000 after buying an additional 327,566 shares in the last quarter. Finally, PDT Partners LLC increased its stake in Arcos Dorados by 43.8% in the 2nd quarter. PDT Partners LLC now owns 564,473 shares of the restaurant operator's stock worth $4,454,000 after buying an additional 171,800 shares in the last quarter. 55.91% of the stock is currently owned by hedge funds and other institutional investors.

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.