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Stock impact report

Arcos Dorados: Hold Until New Franchise Agreement With MCD Materializes [Seeking Alpha]

Arcos Dorados Holdings Inc. Class A Shares (ARCO) 
Last arcos dorados holdings inc. class a shares earnings: 3/18 08:00 am Check Earnings Report
US:NYSE Investor Relations: arcosdorados.com/ir.html
Company Research Source: Seeking Alpha
Follow Play 7min Summary Arcos Dorados' 2Q24 results show strong topline growth but flat operating income, with challenges in Argentina and increased delivery costs impacting margins. The company is negotiating a 20-year franchise agreement with McDonald's, which could significantly affect future profitability and capital allocation policies. Concerns about high CAPEX, rising depreciation, and potential changes in the Master Franchise Agreement led me to downgrade Arcos to a Hold rating. Current valuation appears attractive, but uncertainties around future margins and the new franchise agreement warrant a cautious approach until more details are revealed. M. Suhail Arcos Dorados ( NYSE: ARCO ) 2Q24 results were good on the top line and EBITDA lines, albeit more negative at the operating income level. The company's business is not showing meaningful deceleration except for the challenged Argentinian markets. On a longer-term basis, the company announced that it is Show less Read more
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