Why Arcos Dorados (ARCO) Stock Is Trading Up Today

Radek Strnad /
2023/11/16 11:52 am EST

What Happened:

Shares of fast-food chain Arcos Dorados (NYSE:ARCO) jumped 8.7% in the morning session after the company reported third quarter results that blew past analysts' revenue expectations, driven by a meaningful same-store sales beat. We were also excited its EPS outperformed Wall Street's estimates. Management attributed the strong performance to McDonald's brand resilience, inherent competitive advantages, and consistent execution. This led to notable sales growth and market share gains across the Arcos Dorados footprint, particularly in key markets such as Brazil, Chile, Costa Rica, and Mexico. Zooming out, we think this was a fantastic quarter that should have shareholders cheering.

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What is the market telling us:

Arcos Dorados's shares are not very volatile than the market average and over the last year have had only 5 moves greater than 5%. In context of that, today's move is indicating the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.

Arcos Dorados is up 46.5% since the beginning of the year. Investors who bought $1,000 worth of Arcos Dorados's shares 5 years ago would now be looking at an investment worth $1,562.

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