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Arcos Dorados Holdings Inc (NYSE:ARCO), the largest franchisee of McDonald's (NYSE:MCD) restaurants in Latin America and the Caribbean, saw its stock price touch a 52-week low of $6.87 USD. With a current P/E ratio of 10.27 and a dividend yield of 3.31%, InvestingPro analysis suggests the stock is trading below its Fair Value. This downturn reflects a significant retreat from better-performing times, with the company's shares experiencing a stark 1-year change, plummeting by -37.08%. Investors are closely monitoring the stock as it navigates through a complex landscape of economic pressures and consumer behavior shifts, which have contributed to its recent performance woes. Despite the current challenges, analyst price targets range from $9.80 to $14.00, suggesting potential upside. The current price level presents a critical juncture for the company as it strives to implement strategic measures to rebound from this low point and regain market confidence. For deeper insights into ARCO's valuation and growth prospects, access the comprehensive Pro Research Report available on InvestingPro.
In other recent news, Arcos Dorados Holdings Inc reported its financial results for the fourth quarter of 2024, with earnings per share (EPS) of $0.28, significantly surpassing the forecast of $0.18. Despite the strong EPS performance, the company reported revenue of $1.14 billion, which was slightly below the forecast of $1.16 billion. The company achieved a full-year EBITDA milestone of $500 million, marking an important achievement in a challenging economic environment. Additionally, Moody's upgraded Arcos Dorados' debt rating to BA1 with a stable outlook, while Fitch raised its rating to BBB-, also with a stable outlook.
The company plans to open between 91 to 100 new Experience of the Future (EOTF) restaurants in 2025, with capital expenditures projected between $300 million and $350 million. Analysts from Bank of America and Itau BBA have shown interest in the company's strategic direction, particularly in digital sales, which accounted for 58% of sales in the fourth quarter. The loyalty program, which is being rolled out across various markets, has also been a focal point for growth. Arcos Dorados' management remains optimistic about future growth, focusing on digital expansion and market leadership in Latin America.
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