UPDATE: J.P. Morgan Upgrades Arcos Dorados Holding Ahead of Expected Outperformance
In a report published Tuesday, J.P. Morgan analyst John Ivankoe upgraded the rating on Arcos Dorados Holding (NYSE: ARCO) from Neutral to Overweight, and raised the price target from $13.00 to $14.00.
In the report, J.P. Morgan noted, “We are upgrading ARCO from Neutral to Overweight, our first OW rating since we covered the stock post-IPO in April 2011. Over the past few years, Arcos Dorados has gone from one of most active names in terms of client interest to one of the least. Over the past two years, the stock is a significant underperformer, down 49% vs. up 37% for the S&P and down 28% for the Ibovespa index in USD terms. In fact, with a recent improvement in the BRL/USD and a MCD-implied 3Q Arcos comp of ~15%, which continued a ~13% comp in June from the overall 11.6% comp reported in 2Q, core business conditions look better than they have been in almost two years. After missing estimates for several quarters, 2Q13 was the closest to low set expectations since the IPO. We have revised estimates to currency implied by the futures curve, same-store sales trends implied by MCD, and associated improvements to margin in out years, but also with slightly lower unit growth expectations in Brazil due to modest permitting/construction delays.”
Arcos Dorados Holding closed on Monday at $11.78.
Latest Ratings for ARCO
|Jan 2015||Morgan Stanley||Maintains||Equal-weight|
|Nov 2014||JP Morgan||Maintains||Neutral|
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