UPDATE: Citi Downgrades Arcos Dorados Holdings; Lowers PT

According to a research report published this morning, Citi has downgraded Arcos Dorados

from Buy to Neutral, and lowered PT from $23 to $16. In the report, Citi said, "We are downgrading to Neutral, despite 1Q12 report that was better than our estimates, for three reasons. First, we believe the margin decline in Brazil will drive down the consensus and Friday's conference call was less convincing on a 2H12 pickup. Second, we would like to see a margin recovery, not the decline implied by the re-affirmed 2012 guidance. Finally, we believe the aggressive monetary easing in Brazil, although accelerating economic growth, could translate to a weaker exchange rate, complicating ARCO's USD results and ability to meet 2012 guidance." Arcos Dorados closed Friday at $14.28.