Handle With Care: Arcos Dorados Holdings Inc. (NYSE: ARCO)


Invesco Advisers, Inc. recently announced the acquisition of new stake in Arcos Dorados Holdings Inc. (NYSE:ARCO). The institutional investor has increased its shareholding in the Consumer Cyclical company by 17.68% to 10.45 million shares with purchase of 1.57 million shares. This fresh investment now brings its stake to 8.31% valued currently at $48.6 million. In addition, Teachers Advisors LLC raised its holdings by 76292.0 to 9.98 million shares. And Armadillo Capital Management LLC has lifted its position by 15.00% or 0.38 million shares – to 2.93 million shares.

With over 1.79 million Arcos Dorados Holdings Inc. (ARCO) shares trading Tuesday and a closing price of $4.60 on the day, the dollar volume was approximately $8.22 million. The shares have shown a negative weekly performance of -1.08% and its price on 08/25/20 gained nearly 2.91%. Currently, there are 207.04M common shares owned by the public and among those 125.61M shares have been available to trade.

An analysis of what Wall Street brokers have to say about the expected price targets for this stock gives us this picture: 7 analysts who have offered their price forecasts for ARCO have a consensus price objective of $6.03. The analysts have set the share’s price value over the next 12 months at a high of $8.00 and a low of $4.50 should the stock experience a downside. Incidentally, analysts’ outlook for the Arcos Dorados Holdings Inc. stock is 1.90 for the next 12 months. The average price target is 24.59% above its last price level and an upside to the estimated low will see the stock lose -2.22% over that period. But an upside of 42.5% will see the stock hit the forecast high price target while mean target price for the stock is $5.92.

The top 3 mutual fund holders in Arcos Dorados Holdings Inc. are TIAA-CREF Emerging Markets Equity, CREF Stock Account, and Invesco Developing Markets Fund. TIAA-CREF Emerging Markets Equity owns 9.98 million shares of the company’s stock, all valued at over $46.43 million. Invesco Developing Markets Fund bought 0.37 million shares to bring its total holdings to over 8.16 million shares at a value of $37.96 million. Invesco Developing Markets Fund now owns shares totaling to 6.49% of the shares outstanding.

Shares of Arcos Dorados Holdings Inc. (NYSE: ARCO) opened at $4.55, up $0.08 from a prior closing price of $4.47. However, the script later closed the day at $4.60, up 2.91%. The company’s stock has a 5-day price change of -1.08% and 16.53% over the past three months. ARCO shares are trading -42.45% year to date (YTD), with the 12-month market performance down to -32.64% lower. It has a 12-month low price of $2.92 and touched a high of $8.29 over the same period. Currently, 1.79 million shares have been traded, compared to an average intraday trading volume of 1.17 million shares. The stock is trading above its simple moving averages at the SMA20, SMA50, and SMA200, as the current price level is off by -2.30%, 0.86%, and -16.23% respectively.

Institutional ownership of Arcos Dorados Holdings Inc. (NYSE: ARCO) shares accounts for 87.20% of the company’s 207.04M shares outstanding. Mutual fund holders own 35.63%, while other institutional holders and individual stakeholders account for 37.48% and — respectively.

It has a market capitalization of $954.73M and a beta (3y monthly) value of 1.73. The earnings-per-share (ttm) stands at -$0.41. Price movements for the stock have been influenced by the stock’s volatility, which stands at 3.40% over the week and 4.37% over the month.

Analysts forecast that Arcos Dorados Holdings Inc. (ARCO) will achieve an EPS of -$0.16 for the current quarter, -$0.02 for the next quarter and $0.08 for 2021. The lowest estimate earnings-per-share for the quarter is -$0.16 while analysts give the company a high EPS estimate of -$0.16. Comparatively, EPS for the current quarter was $0.13 a year ago. Earnings per share for the fiscal year are expected to increase by 122.60%, and 113.10% over the next financial year. EPS should shrink at an annualized rate of 16.50% over the next five years, compared to 22.40% over the past 5-year period.

If you are looking to buy this stock, then you may note that the average analyst recommendation by 7 brokerage firm advisors rate Arcos Dorados Holdings Inc. (ARCO) as a “Strong Buy” at a consensus score of 1.90. Specifically, 7 Wall Street analysts polled rate the stock as a buy, while 0 of the 7 advise that investors “hold,” and 0 rated it as a “Sell.”

Looking at the support for the ARCO, a number of firms have released research notes about the stock. Morgan Stanley stated their Overweight rating for the stock in a research note on June 26, 2020, with the firm’s price target at. BofA/Merrill coverage for the Arcos Dorados Holdings Inc. (ARCO) stock in a research note released on October 21, 2019 offered a Buy rating with a price target of. JP Morgan was of a view on July 10, 2019 that the stock is Overweight, while BofA/Merrill gave the stock Underperform rating on January 22, 2019, issuing a price target of. HSBC Securities on their part issued Buy rating on November 15, 2017.


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