Evaluating the Valuation of Arcos Dorados (NYSE:ARCO) Following Recent Slight Increase in Share Price
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Nov 09 2025
0mins
Should l Buy ARCO?
Source: Yahoo Finance
Recent Share Performance: Arcos Dorados Holdings has experienced a slight recovery in share price over the past month, but remains down 5.9% year-to-date and 14.4% over the past year, indicating ongoing volatility.
Valuation Insights: The stock is currently trading at $7.06, below analyst price targets of $10.40, suggesting potential undervaluation driven by digital growth initiatives and changing consumer trends.
Growth Potential: The company is focusing on expanding and modernizing its restaurants, which, along with rising middle-class spending in Latin America, could lead to increased demand for out-of-home dining and sustained revenue growth.
Risks and Projections: While analysts predict significant upside, risks such as consumer weakness in Brazil and rising costs could impact sales and profit margins, leading to differing views on the stock's fair value.
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Analyst Views on ARCO
Wall Street analysts forecast ARCO stock price to rise
1 Analyst Rating
0 Buy
1 Hold
0 Sell
Hold
Current: 8.020
Low
8.50
Averages
8.50
High
8.50
Current: 8.020
Low
8.50
Averages
8.50
High
8.50
About ARCO
Arcos Dorados Holdings Inc. is a McDonald's franchisee. The Company operates or franchises over 2,140 McDonald's-branded restaurants. It divides its operations into four geographical divisions: Brazil; the Caribbean division, consisting of Aruba, Colombia, Curacao, French Guiana, Guadeloupe, Martinique, Puerto Rico, Trinidad and Tobago, the United States Virgin Islands of Saint Croix and Saint Thomas, and Venezuela; the North Latin America division (NOLAD), consisting of Costa Rica, Mexico and Panama, and the South Latin America division (SLAD), consisting of Argentina, Chile, Ecuador, Peru and Uruguay. Its menus feature over three tiers of products: entry-level options, such as its Big Pleasures, Small Prices offerings and Almuerzos Colombianos (Colombian Lunches) in Colombia; core menu options, such as the Big Mac, Happy Meal and Quarter Pounder, and premium options, such as Big Tasty or Angus premium hamburgers and chicken sandwiches and low-calorie or low-sodium products.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Arcos Dorados Projects Higher Q1 Sales Growth Amid Economic Pressures
- Performance Outlook: Arcos Dorados anticipates that its systemwide comparable sales growth for Q1 2026 will exceed that of Q4 2025, indicating the company's ability to achieve growth despite ongoing macroeconomic pressures in Latin America.
- Currency Strength Support: The strengthening of local currencies in the company's primary markets at the beginning of 2026 compared to early 2025 is expected to further drive total revenue growth in US dollars, demonstrating resilience amid currency fluctuations.
- Earnings Release Schedule: The company will publish its financial results for Q4 2025 and the full year on March 19, 2026, with Q1 2026 results expected in mid-May 2026, prompting investor attention on these figures to assess financial health.
- Market Position Consolidation: As the largest restaurant chain in Latin America and the world's largest independent McDonald's franchisee, Arcos Dorados operates over 2,500 restaurants across 21 countries and territories, employing more than 100,000 people, underscoring its significant influence in the fast-food sector.
See More
Arcos Dorados Announces Early Tender Results
- Tender Offer Overview: Arcos Dorados announced a cash offer to purchase up to $150 million of its 6.125% Sustainability-Linked Senior Notes, reflecting the company's proactive approach to debt management aimed at optimizing its capital structure and reducing financing costs.
- Valid Tender Ratio: As of the early tender time on February 12, 2026, approximately $134.796 million of the notes were validly tendered, representing 38.51% of the outstanding notes, indicating a strong market acceptance of this debt instrument, which may enhance the company's future financing capabilities.
- Total Consideration Structure: Holders who validly tendered their notes will receive total consideration, including the early tender payment and accrued interest, expected to be paid on February 17, 2026, which will boost investor confidence and potentially stabilize the company's stock price.
- Tender Expiration Date: The offer is set to expire on March 2, 2026, and any extension by the company could further impact market liquidity and investor decisions, reflecting the company's agility in responding to capital market conditions.
See More
Arcos Dorados Projects Higher Q1 Sales Growth
- Performance Revision: Arcos Dorados anticipates higher systemwide comparable sales growth in Q1 2026 compared to Q4 2025, demonstrating the company's resilience and adaptability in the face of macroeconomic pressures.
- Currency Impact Analysis: The company highlights that local currencies in its main markets have appreciated at the start of 2026 compared to early 2025, which will support total revenue growth in US dollars, further boosting investor confidence in future performance.
- Earnings Release Schedule: Arcos Dorados plans to publish its Q4 2025 and full-year results on March 19, 2026, which is expected to provide clearer performance guidance for investors, aiding in the assessment of the company's financial health.
- Market Position Consolidation: As the largest restaurant chain in Latin America and the world's largest independent McDonald's franchisee, Arcos Dorados operates over 2,500 restaurants across 21 countries and territories, continuously driving local economic development and job creation, showcasing its leadership in the industry.
See More
Arcos Dorados Announces Early Tender Results for Notes Purchase
- Tender Offer Overview: Arcos Dorados announced a cash offer to purchase up to $150 million of its 6.125% Sustainability-Linked Senior Notes, reflecting the company's proactive approach to debt management aimed at optimizing its capital structure and reducing financing costs.
- Tender Participation Rate: As of the early tender time, approximately $134.796 million of the notes were validly tendered, representing about 38.51% of the outstanding notes, indicating strong investor interest in the offer, which may enhance the company's future financial flexibility.
- Total Consideration Details: Holders who validly tendered their notes will receive a total consideration of $1,030 per $1,000 principal amount, including the early tender payment, demonstrating the company's appeal to investors and its sensitivity to market conditions.
- Tender Timeline: The offer is set to expire on March 2, 2026, with the company retaining the flexibility to extend the tender period based on market conditions, showcasing its adaptability in a dynamic market environment.
See More
Arcos Dorados to Participate in 2026 Investor Conference
- Investor Conference Participation: Arcos Dorados will participate in the BTG CEO Conference Brasil 2026, held in São Paulo from February 10 to 12, showcasing its leadership in the Latin American market and likely attracting investor interest.
- Restaurant Operation Scale: As of December 31, 2025, Arcos Dorados and its sub-franchisees operate over 2,500 restaurants across 21 countries and territories, employing more than 100,000 people, demonstrating its significant influence in the quick-service restaurant sector.
- Community Development Commitment: The company is dedicated to providing young people with their first formal job opportunities and achieving a positive environmental impact through its Recipe for the Future initiative, further solidifying its image of social responsibility.
- Listing Information: Arcos Dorados is listed on the New York Stock Exchange (NYSE:ARCO), with investor relations information available on the company’s website, enhancing transparency and investor confidence.
See More
Arcos Dorados to Refinance Debt with New Bank Loan
- Debt Refinancing Plan: Arcos Dorados Holdings announced plans to refinance part of its debt through a new bank loan, aimed at repurchasing its 6.125% sustainability-linked senior notes due 2029, which is expected to reduce the average U.S. dollar cost of long-term debt by approximately 55 basis points.
- Loan Details: The company's Brazilian subsidiary borrowed $150 million in December 2025, with the new bank debt due in 2029 having an estimated U.S. dollar cost of 2.53%, achieved through derivative instruments to manage interest rates and currency exposure, ensuring manageable financing costs.
- Impact of Repurchase Plan: If the tender offer is fully accepted, Arcos Dorados will optimize its capital structure without materially affecting debt maturity, currency exposure, or net leverage, thereby enhancing financial flexibility.
- Market Reaction: Following the announcement, Arcos Dorados' stock rose by 0.49% to close at $8.18, indicating a positive market response to its debt management strategy, which may bolster investor confidence.
See More
Arcos Dorados Projects Higher Q1 Sales Growth Amid Economic Pressures
- Performance Outlook: Arcos Dorados anticipates that its systemwide comparable sales growth for Q1 2026 will exceed that of Q4 2025, indicating the company's ability to achieve growth despite ongoing macroeconomic pressures in Latin America.
- Currency Strength Support: The strengthening of local currencies in the company's primary markets at the beginning of 2026 compared to early 2025 is expected to further drive total revenue growth in US dollars, demonstrating resilience amid currency fluctuations.
- Earnings Release Schedule: The company will publish its financial results for Q4 2025 and the full year on March 19, 2026, with Q1 2026 results expected in mid-May 2026, prompting investor attention on these figures to assess financial health.
- Market Position Consolidation: As the largest restaurant chain in Latin America and the world's largest independent McDonald's franchisee, Arcos Dorados operates over 2,500 restaurants across 21 countries and territories, employing more than 100,000 people, underscoring its significant influence in the fast-food sector.
See More
Arcos Dorados Announces Early Tender Results
- Tender Offer Overview: Arcos Dorados announced a cash offer to purchase up to $150 million of its 6.125% Sustainability-Linked Senior Notes, reflecting the company's proactive approach to debt management aimed at optimizing its capital structure and reducing financing costs.
- Valid Tender Ratio: As of the early tender time on February 12, 2026, approximately $134.796 million of the notes were validly tendered, representing 38.51% of the outstanding notes, indicating a strong market acceptance of this debt instrument, which may enhance the company's future financing capabilities.
- Total Consideration Structure: Holders who validly tendered their notes will receive total consideration, including the early tender payment and accrued interest, expected to be paid on February 17, 2026, which will boost investor confidence and potentially stabilize the company's stock price.
- Tender Expiration Date: The offer is set to expire on March 2, 2026, and any extension by the company could further impact market liquidity and investor decisions, reflecting the company's agility in responding to capital market conditions.
See More
Arcos Dorados Projects Higher Q1 Sales Growth
- Performance Revision: Arcos Dorados anticipates higher systemwide comparable sales growth in Q1 2026 compared to Q4 2025, demonstrating the company's resilience and adaptability in the face of macroeconomic pressures.
- Currency Impact Analysis: The company highlights that local currencies in its main markets have appreciated at the start of 2026 compared to early 2025, which will support total revenue growth in US dollars, further boosting investor confidence in future performance.
- Earnings Release Schedule: Arcos Dorados plans to publish its Q4 2025 and full-year results on March 19, 2026, which is expected to provide clearer performance guidance for investors, aiding in the assessment of the company's financial health.
- Market Position Consolidation: As the largest restaurant chain in Latin America and the world's largest independent McDonald's franchisee, Arcos Dorados operates over 2,500 restaurants across 21 countries and territories, continuously driving local economic development and job creation, showcasing its leadership in the industry.
See More
Arcos Dorados Announces Early Tender Results for Notes Purchase
- Tender Offer Overview: Arcos Dorados announced a cash offer to purchase up to $150 million of its 6.125% Sustainability-Linked Senior Notes, reflecting the company's proactive approach to debt management aimed at optimizing its capital structure and reducing financing costs.
- Tender Participation Rate: As of the early tender time, approximately $134.796 million of the notes were validly tendered, representing about 38.51% of the outstanding notes, indicating strong investor interest in the offer, which may enhance the company's future financial flexibility.
- Total Consideration Details: Holders who validly tendered their notes will receive a total consideration of $1,030 per $1,000 principal amount, including the early tender payment, demonstrating the company's appeal to investors and its sensitivity to market conditions.
- Tender Timeline: The offer is set to expire on March 2, 2026, with the company retaining the flexibility to extend the tender period based on market conditions, showcasing its adaptability in a dynamic market environment.
See More
Arcos Dorados to Participate in 2026 Investor Conference
- Investor Conference Participation: Arcos Dorados will participate in the BTG CEO Conference Brasil 2026, held in São Paulo from February 10 to 12, showcasing its leadership in the Latin American market and likely attracting investor interest.
- Restaurant Operation Scale: As of December 31, 2025, Arcos Dorados and its sub-franchisees operate over 2,500 restaurants across 21 countries and territories, employing more than 100,000 people, demonstrating its significant influence in the quick-service restaurant sector.
- Community Development Commitment: The company is dedicated to providing young people with their first formal job opportunities and achieving a positive environmental impact through its Recipe for the Future initiative, further solidifying its image of social responsibility.
- Listing Information: Arcos Dorados is listed on the New York Stock Exchange (NYSE:ARCO), with investor relations information available on the company’s website, enhancing transparency and investor confidence.
See More
Arcos Dorados to Refinance Debt with New Bank Loan
- Debt Refinancing Plan: Arcos Dorados Holdings announced plans to refinance part of its debt through a new bank loan, aimed at repurchasing its 6.125% sustainability-linked senior notes due 2029, which is expected to reduce the average U.S. dollar cost of long-term debt by approximately 55 basis points.
- Loan Details: The company's Brazilian subsidiary borrowed $150 million in December 2025, with the new bank debt due in 2029 having an estimated U.S. dollar cost of 2.53%, achieved through derivative instruments to manage interest rates and currency exposure, ensuring manageable financing costs.
- Impact of Repurchase Plan: If the tender offer is fully accepted, Arcos Dorados will optimize its capital structure without materially affecting debt maturity, currency exposure, or net leverage, thereby enhancing financial flexibility.
- Market Reaction: Following the announcement, Arcos Dorados' stock rose by 0.49% to close at $8.18, indicating a positive market response to its debt management strategy, which may bolster investor confidence.
See More
