Analyst Julia Rizzo of Morgan Stanley maintained a Buy rating on Arcos Dorados Holdings (ARCO – Research Report), retaining the price target of $13.00.
Julia Rizzo’s rating is based on Arcos Dorados Holdings’ ability to deliver resilient financial results despite challenging macroeconomic conditions, such as weaker currencies and higher inflation. The company’s strong brand equity and successful implementation of digital, delivery, and drive-thru strategies have reinforced its leadership position in the market. These factors have contributed to a solid sales growth of 26.6% year-over-year in constant currency terms, driven by significant same-store sales growth in high-inflation economies like Argentina and Venezuela.
Moreover, Arcos Dorados has demonstrated robust EBITDA growth, with a 30% increase year-over-year in local currency, and a 1% rise in USD terms, which was ahead of consensus expectations. The expansion of EBITDA margins and a reduction in food and paper costs have also been notable, despite challenges in Brazil. The company’s strategic focus on managing expenses and expanding its restaurant footprint has further supported its positive financial performance, leading to a Buy rating from Julia Rizzo.
According to TipRanks, Rizzo is a 2-star analyst with an average return of -4.9% and a 25.00% success rate.