Arcos Dorados (NYSE:ARCO) Shares Gap Up – Still a Buy?

Shares of Arcos Dorados Holdings Inc. (NYSE:ARCO) gapped up before the market opened on Monday. The stock had previously closed at $7.11, but opened at $7.77. Arcos Dorados shares last traded at $7.7260, with a volume of 926,275 shares.

Analysts Set New Price Targets

ARCO has been the topic of a number of recent analyst reports. JPMorgan Chase & Co. raised shares of Arcos Dorados from a “neutral” rating to an “overweight” rating and increased their target price for the company from $9.00 to $10.50 in a research report on Friday, July 17th. Zacks Research downgraded shares of Arcos Dorados from a “strong-buy” rating to a “hold” rating in a research note on Monday, August 10th. Finally, Weiss Ratings lowered Arcos Dorados from a “hold (c)” rating to a “hold (c-)” rating in a report on Monday, September 14th. Three research analysts have rated the stock with a Buy rating and two have issued a Hold rating to the stock. According to MarketBeat.com, the company currently has a consensus rating of “Moderate Buy” and an average target price of $10.50.

Arcos Dorados Price Performance

The company has a quick ratio of 0.81, a current ratio of 0.88 and a debt-to-equity ratio of 1.14. The firm has a market capitalization of $1.72 billion, a price-to-earnings ratio of 6.69 and a beta of 0.48. The company has a fifty day moving average price of $7.88 and a two-hundred day moving average price of $8.27.

Arcos Dorados (NYSE:ARCO) last announced its earnings results on Friday, August 14th. The restaurant operator reported $0.22 EPS for the quarter, beating analysts’ consensus estimates of $0.15 by $0.07. The business had revenue of $1.31 billion for the quarter, compared to analysts’ expectations of $1.28 billion. Arcos Dorados had a net margin of 5.15% and a return on equity of 12.50%. On average, equities research analysts expect that Arcos Dorados Holdings Inc. will post 0.79 EPS for the current fiscal year.

Institutional Investors Weigh In On Arcos Dorados

Several hedge funds have recently made changes to their positions in the business. DGS Capital Management LLC increased its holdings in shares of Arcos Dorados by 10.6% in the 4th quarter. DGS Capital Management LLC now owns 13,481 shares of the restaurant operator’s stock valued at $99,000 after purchasing an additional 1,290 shares in the last quarter. NewEdge Wealth LLC boosted its holdings in Arcos Dorados by 13.2% during the first quarter. NewEdge Wealth LLC now owns 20,289 shares of the restaurant operator’s stock worth $167,000 after buying an additional 2,360 shares in the last quarter. Confluence Investment Management LLC boosted its holdings in Arcos Dorados by 21.0% during the second quarter. Confluence Investment Management LLC now owns 21,798 shares of the restaurant operator’s stock worth $176,000 after buying an additional 3,783 shares in the last quarter. Public Employees Retirement System of Ohio acquired a new position in Arcos Dorados during the second quarter worth about $31,000. Finally, FNY Investment Advisers LLC acquired a new position in Arcos Dorados during the second quarter worth about $40,000. Institutional investors and hedge funds own 55.91% of the company’s stock.

About Arcos Dorados

Arcos Dorados Holdings Inc is the largest independent McDonald’s franchisee in the world and the exclusive master franchisee for McDonald’s in Latin America and the Caribbean. The company operates and franchises McDonald’s restaurants across 20 countries and territories, serving customers through company-operated and franchised locations.

Its restaurant business offers McDonald’s products including hamburgers, chicken sandwiches, French fries, breakfast items, desserts, soft drinks and McCafé beverages.