Arcos Dorados (NYSE:ARCO) Shares Gap Up Following Better-Than-Expected Earnings

Arcos Dorados Holdings Inc. (NYSE:ARCO) shares gapped up before the market opened on Thursday after the company announced better than expected quarterly earnings. The stock had previously closed at $7.90, but opened at $8.45. Arcos Dorados shares last traded at $8.3330, with a volume of 381,885 shares trading hands.

The restaurant operator reported $0.22 earnings per share for the quarter, topping analysts’ consensus estimates of $0.15 by $0.07. Arcos Dorados had a net margin of 4.86% and a return on equity of 10.47%. The business had revenue of $1.31 billion for the quarter, compared to the consensus estimate of $1.28 billion.

Wall Street Analyst Weigh In

A number of equities research analysts have recently weighed in on the company. JPMorgan Chase & Co. raised Arcos Dorados from a “neutral” rating to an “overweight” rating and raised their price target for the stock from $9.00 to $10.50 in a research note on Friday, July 17th. Zacks Research downgraded Arcos Dorados from a “strong-buy” rating to a “hold” rating in a report on Monday. Wall Street Zen raised shares of Arcos Dorados from a “hold” rating to a “buy” rating in a research report on Saturday, May 23rd. Santander upgraded shares of Arcos Dorados to an “outperform” rating in a research note on Monday, April 20th. Finally, Weiss Ratings downgraded shares of Arcos Dorados from a “hold (c+)” rating to a “hold (c)” rating in a research report on Monday, June 29th. Three research analysts have rated the stock with a Buy rating and two have issued a Hold rating to the company. According to data from MarketBeat, the stock has an average rating of “Moderate Buy” and a consensus target price of $10.50.

Institutional Trading of Arcos Dorados

Several large investors have recently made changes to their positions in the stock. Lazard Asset Management LLC lifted its stake in shares of Arcos Dorados by 7.9% in 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 during the last quarter. Pzena Investment Management LLC grew its stake in Arcos Dorados by 1.7% in the 1st 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 last quarter. Moerus Capital Management LLC raised its holdings in 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 worth $35,175,000 after acquiring an additional 706,683 shares during the period. Hussman Strategic Advisors Inc. acquired a new position in Arcos Dorados during the 4th quarter worth $771,000. Finally, Dumac Inc. acquired a new position in Arcos Dorados during the 4th quarter worth $447,000. Institutional investors own 55.91% of the company’s stock.

Arcos Dorados Price Performance

The company has a debt-to-equity ratio of 1.25, a current ratio of 0.80 and a quick ratio of 0.73. The stock’s fifty day simple moving average is $8.29 and its 200-day simple moving average is $8.42. The company has a market capitalization of $1.75 billion, a P/E ratio of 7.48 and a beta of 0.48.

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.