Wall Street Zen Downgrades Arcos Dorados (NYSE:ARCO) to Hold

Key Points

• Wall Street Zen downgraded Arcos Dorados (NYSE:ARCO) from a "buy" to a "hold" rating in a note to investors.
• The stock's consensus remains mixed—two analysts rate it Buy and three rate it Hold, giving an average rating of "Hold" and an average target price of $8.70.
• In the most recent quarter ARCO missed earnings (EPS $0.12 vs. $0.20 expected) despite revenue rising 10.7% year-over-year; the shares trade around $9.22 with a market cap of ~$1.94B and a P/E of 9.13.

Arcos Dorados (NYSE:ARCO - Get Free Report) was downgraded by investment analysts at Wall Street Zen from a "buy" rating to a "hold" rating in a note issued to investors on Saturday.

A number of other research firms have also recently weighed in on ARCO. Weiss Ratings reaffirmed a "hold (c-)" rating on shares of Arcos Dorados in a research report on Monday, December 29th. Santander raised shares of Arcos Dorados to an "outperform" rating in a research report on Monday. Finally, The Goldman Sachs Group reaffirmed a "buy" rating on shares of Arcos Dorados in a research report on Wednesday, April 8th. Two investment analysts have rated the stock with a Buy rating and three have given a Hold rating to the stock. According to MarketBeat, the stock presently has an average rating of "Hold" and an average target price of $8.70.

Arcos Dorados Stock Performance

NYSE:ARCO opened at $9.22 on Friday. The company has a debt-to-equity ratio of 1.46, a quick ratio of 0.95 and a current ratio of 1.03. The stock has a market capitalization of $1.94 billion, a P/E ratio of 9.13, a PEG ratio of 3.32 and a beta of 0.48. The company has a 50 day moving average price of $8.43 and a 200 day moving average price of $7.81. Arcos Dorados has a fifty-two week low of $6.51 and a fifty-two week high of $9.75.

Arcos Dorados (NYSE:ARCO - Get Free Report) last posted its quarterly earnings data on Thursday, March 19th. The restaurant operator reported $0.12 earnings per share for the quarter, missing analysts' consensus estimates of $0.20 by ($0.08). The company had revenue of $1.27 billion for the quarter, compared to analysts' expectations of $1.26 billion. Arcos Dorados had a return on equity of 8.12% and a net margin of 4.53%.The business's revenue for the quarter was up 10.7% on a year-over-year basis. During the same period in the previous year, the business posted $0.28 EPS. Equities research analysts forecast that Arcos Dorados will post 0.69 EPS for the current year.

Institutional Investors Weigh In On Arcos Dorados

Hedge funds and other institutional investors have recently modified their holdings of the company. Emeth Value Capital LLC raised its holdings in shares of Arcos Dorados by 29.0% in the 3rd quarter. Emeth Value Capital LLC now owns 1,973,667 shares of the restaurant operator's stock valued at $13,322,000 after purchasing an additional 443,327 shares in the last quarter. Seafarer Capital Partners LLC raised its holdings in shares of Arcos Dorados by 53.8% in the 3rd quarter. Seafarer Capital Partners LLC now owns 400,000 shares of the restaurant operator's stock valued at $2,700,000 after purchasing an additional 140,000 shares in the last quarter. General American Investors Co. Inc. raised its holdings in shares of Arcos Dorados by 62.2% in the 3rd quarter. General American Investors Co. Inc. now owns 700,178 shares of the restaurant operator's stock valued at $4,726,000 after purchasing an additional 268,484 shares in the last quarter. Quantbot Technologies LP raised its holdings in shares of Arcos Dorados by 1,472,528.6% in the 3rd quarter. Quantbot Technologies LP now owns 103,084 shares of the restaurant operator's stock valued at $696,000 after purchasing an additional 103,077 shares in the last quarter. Finally, Optimize Financial Inc acquired a new stake in shares of Arcos Dorados in the 3rd quarter valued at $574,000. 55.91% of the stock is currently owned by institutional investors and hedge funds.

Arcos Dorados Company Profile

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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