Wall Street Zen Upgrades Arcos Dorados (NYSE:ARCO) to Buy

Key Points

• Wall Street Zen has upgraded Arcos Dorados (NYSE:ARCO) from a "hold" rating to a "buy" rating, suggesting increased confidence in the stock's performance.
• Conversely, JPMorgan Chase & Co. downgraded Arcos Dorados from "overweight" to "neutral," lowering its price target from $10.50 to $8.80.
• Arcos Dorados reported a quarterly earnings per share of $0.11, exceeding the estimate of $0.05, but its revenue of $1.14 billion fell short of analyst expectations of $1.22 billion.

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

Separately, JPMorgan Chase & Co. lowered shares of Arcos Dorados from an "overweight" rating to a "neutral" rating and dropped their price target for the stock from $10.50 to $8.80 in a research report on Wednesday, July 2nd. One analyst has rated the stock with a Hold rating, According to MarketBeat.com, the company has a consensus rating of "Hold" and an average price target of $8.80.

Arcos Dorados Stock Performance

NYSE ARCO opened at $6.80 on Friday. The company has a current ratio of 0.80, a quick ratio of 0.73 and a debt-to-equity ratio of 1.62. The firm's fifty day moving average price is $7.10 and its two-hundred day moving average price is $7.48. Arcos Dorados has a 1 year low of $6.51 and a 1 year high of $10.27. The firm has a market capitalization of $1.43 billion, a P/E ratio of 10.79, a price-to-earnings-growth ratio of 1.37 and a beta of 0.63.

Arcos Dorados (NYSE:ARCO - Get Free Report) last posted its quarterly earnings results on Wednesday, August 13th. The restaurant operator reported $0.11 earnings per share (EPS) for the quarter, topping the consensus estimate of $0.05 by $0.06. Arcos Dorados had a net margin of 2.89% and a return on equity of 24.54%. The firm had revenue of $1.14 billion for the quarter, compared to analyst estimates of $1.22 billion. During the same period in the prior year, the firm posted $0.13 earnings per share. The company's quarterly revenue was up 2.8% compared to the same quarter last year. As a group, research analysts anticipate that Arcos Dorados will post 0.63 EPS for the current year.

Hedge Funds Weigh In On Arcos Dorados

Several institutional investors and hedge funds have recently modified their holdings of ARCO. Jane Street Group LLC increased its holdings in shares of Arcos Dorados by 156.6% in the fourth quarter. Jane Street Group LLC now owns 195,751 shares of the restaurant operator's stock valued at $1,425,000 after purchasing an additional 119,477 shares during the last quarter. D. E. Shaw & Co. Inc. increased its holdings in shares of Arcos Dorados by 121.7% in the fourth quarter. D. E. Shaw & Co. Inc. now owns 22,253 shares of the restaurant operator's stock valued at $162,000 after purchasing an additional 12,217 shares during the last quarter. Janus Henderson Group PLC acquired a new position in shares of Arcos Dorados in the fourth quarter valued at $146,000. Squarepoint Ops LLC acquired a new position in shares of Arcos Dorados in the fourth quarter valued at $223,000. Finally, Voloridge Investment Management LLC increased its holdings in shares of Arcos Dorados by 3.6% in the fourth quarter. Voloridge Investment Management LLC now owns 900,088 shares of the restaurant operator's stock valued at $6,553,000 after purchasing an additional 31,010 shares during the last quarter. 55.91% of the stock is currently owned by institutional investors and hedge funds.

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.

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