Arcos Dorados (NYSE:ARCO) Sets New 12-Month Low After Analyst Downgrade

Key Points

• Arcos Dorados shares hit a new 52-week low of $6.60 after Bank of America downgraded the stock from Buy to Neutral and set a $9.00 price target.
• Analyst sentiment remains mixed but broadly positive: the stock has a “Moderate Buy” consensus rating and a $9.75 average price target, despite recent downgrades.
• Institutional investors own 55.91% of the company, while its latest quarterly results exceeded expectations with $0.22 in earnings per share and $1.31 billion in revenue.

Arcos Dorados Holdings Inc. (NYSE:ARCO - Get Free Report)'s share price hit a new 52-week low during trading on Monday after Bank of America downgraded the stock from a buy rating to a neutral rating. Bank of America now has a $9.00 price target on the stock. Arcos Dorados traded as low as $6.60 and last traded at $7.1740, with a volume of 189,569 shares. The stock had previously closed at $8.09.

Several other research firms also recently commented on ARCO. Wall Street Zen downgraded Arcos Dorados from a "buy" rating to a "hold" rating in a research report on Saturday, October 10th. Weiss Ratings upgraded Arcos Dorados from a "hold (c-)" rating to a "hold (c)" rating in a report on Thursday, October 8th. Zacks Research upgraded Arcos Dorados from a "hold" rating to a "strong-buy" rating in a research note on Tuesday, October 20th. Finally, JPMorgan Chase & Co. upgraded shares of Arcos Dorados from a "neutral" rating to an "overweight" rating and lifted their price target for the company from $9.00 to $10.50 in a research report on Friday, July 17th. One investment analyst has rated the stock with a Strong Buy rating, three have assigned a Buy rating and two have given a Hold rating to the company's stock. According to MarketBeat, the stock presently has an average rating of "Moderate Buy" and a consensus price target of $9.75.

Institutional Investors Weigh In On Arcos Dorados

Several large investors have recently added to or reduced their stakes in the stock. Sei Investments Co. boosted its position in Arcos Dorados by 132.8% during the 1st quarter. Sei Investments Co. now owns 3,483,732 shares of the restaurant operator's stock valued at $28,741,000 after purchasing an additional 1,987,271 shares during the period. Lazard Asset Management LLC boosted its holdings 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 buying an additional 1,703,169 shares in the last quarter. Globeflex Capital L P acquired a new stake in shares of Arcos Dorados during the second quarter worth $6,574,000. Moerus Capital Management LLC lifted its position in shares of Arcos Dorados by 19.9% in 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 acquiring an additional 706,683 shares in the last quarter. Finally, Pzena Investment Management LLC raised its position in Arcos Dorados by 1.7% during the first quarter. Pzena Investment Management LLC now owns 10,741,166 shares of the restaurant operator's stock valued at $88,615,000 after buying an additional 178,602 shares during the period. 55.91% of the stock is owned by institutional investors.

Arcos Dorados Price Performance

The stock's 50-day moving average is $7.83 and its 200 day moving average is $8.26. The stock has a market capitalization of $1.53 billion, a PE ratio of 5.88 and a beta of 0.48. The company has a quick ratio of 0.81, a current ratio of 0.88 and a debt-to-equity ratio of 1.14.

Arcos Dorados (NYSE:ARCO - Get Free Report) last released its earnings results on Friday, August 14th. The restaurant operator reported $0.22 earnings per share for the quarter, topping analysts' consensus estimates of $0.15 by $0.07. The firm had revenue of $1.31 billion during the quarter, compared to analyst estimates of $1.28 billion. Arcos Dorados had a net margin of 5.15% and a return on equity of 12.50%. As a group, equities analysts predict that Arcos Dorados Holdings Inc. will post 0.80 earnings per share for the current year.

About Arcos Dorados

Arcos Dorados Holdings Inc NYSE: ARCO is the largest independent McDonald's franchisee in the world. The company operates and franchises McDonald's restaurants across Latin America and the Caribbean under a master franchise agreement with McDonald's Corporation.

Its restaurants offer McDonald's products, including hamburgers, chicken items, french fries, breakfast products, beverages, desserts and other menu offerings. Arcos Dorados also provides services such as McCafé, McDelivery, digital ordering and drive-thru operations, depending on the market.

Headquartered in Buenos Aires, Argentina, Arcos Dorados serves customers in approximately 20 countries and territories, including Argentina, Brazil, Chile, Colombia, Mexico, Peru, Puerto Rico, Uruguay and Venezuela.

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