Arcos Dorados stock price target lowered to $10.50 at BofA on earnings

Published 14/08/2025, 11:26
Arcos Dorados stock price target lowered to $10.50 at BofA on earnings

Investing.com - BofA Securities has lowered its price target on Arcos Dorados Holdings (NYSE:ARCO) to $10.50 from $11.00 while maintaining a Buy rating on the stock. According to InvestingPro data, analysts’ targets range from $8.50 to $14.00, suggesting significant upside potential from the current price of $7.63. The stock has shown strong momentum with a 9.3% gain over the past week.

The McDonald’s franchisee reported earnings per share of $0.11 for the second quarter of 2025, meeting consensus estimates but including a $0.02 refranchising gain from its Mexico operations.

Revenue increased 2.8% in U.S. dollar terms, driven by same-store sales growth of 12.1% and 62 net restaurant openings over the last twelve months.

EBITDA declined 7.3% due to a $13.3 million reduction in non-recurring income, with the company recording a $6.9 million gain in Q2 2025 compared to $20.2 million in Q2 2024. Excluding one-time items, EBITDA rose 4.7% with a 16 basis point margin improvement as payroll and other efficiencies offset higher food and paper costs.

Earnings per share fell 15.2% year-over-year, impacted by the lower non-recurring gains and higher interest expenses, partially offset by reduced foreign exchange losses.

In other recent news, Arcos Dorados Holdings Inc . reported its second-quarter earnings, which surpassed analyst expectations. However, the company’s revenue did not meet the anticipated estimates. Despite the earnings beat, the revenue miss contributed to a decline in the company’s shares in pre-market trading. These developments highlight the mixed performance of Arcos Dorados in the recent quarter. Investors might be interested in how the company plans to address the revenue shortfall moving forward. The earnings report reflects the company’s ongoing financial activities and market position. It remains to be seen how Arcos Dorados will navigate these challenges in the coming quarters.

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