Arcos Dorados Shares Surge on Strong Earnings and Institutional Buying
Arcos Dorados Holdings Inc. (NYSE: ARCO), the largest independent McDonald's franchisee, saw its shares gap up before the market opened on Monday. The stock, which had closed at $7.11 on Friday, opened at $7.77 and last traded at $7.7260 with a volume of 926,275 shares.
Recent analyst ratings on Arcos Dorados have been mixed. Zacks Research downgraded the stock from a "strong-buy" to a "hold" on August 10th, while JPMorgan Chase & Co. upgraded it from "neutral" to "overweight" with a target price increase from $9.00 to $10.50 on July 17th. Weiss Ratings also downgraded the stock from a "hold (c)" to a "hold (c-)" on September 14th. Currently, the stock has an average rating of "Moderate Buy" and an average target price of $10.50.
The company reported quarterly earnings on August 14th, beating estimates with $0.22 earnings per share (EPS) against a consensus of $0.15. Revenue for the quarter was $1.31 billion, surpassing analyst estimates of $1.28 billion. Arcos Dorados operates McDonald's restaurants across 20 countries and territories in Latin America and the Caribbean.
Institutional investors have shown significant interest in Arcos Dorados. Sei Investments Co. boosted its stake by 132.8% in the first quarter, while Lazard Asset Management LLC increased its position by 7.9%. Brightlight Capital Management LP raised its stake by 55.2% during the fourth quarter, and Globeflex Capital L P acquired a new position valued at $6,574,000 in the second quarter. Currently, 55.91% of the stock is owned by institutional investors and hedge funds.