Arcos Dorados: MFA Renewal, Argentinian Recovery To Drive Earnings (Rating Upgrade)
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Arcos Dorados has renewed its franchise agreement with McDonald's, which is expected to reduce royalty fees from 2025. Despite economic challenges in Argentina and Venezuela, improved GDP growth is anticipated, potentially boosting earnings. The stock is considered undervalued with a 48% upside.
January 03, 2025 | 4:00 pm
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Arcos Dorados renewed its franchise agreement with McDonald's, which may reduce royalty fees from 2025. Economic recovery in Argentina is expected to improve earnings, and the stock is seen as undervalued with a 48% upside.
The renewal of the franchise agreement with McDonald's is a significant development for Arcos Dorados, potentially reducing costs. Coupled with expected economic recovery in Argentina, this could lead to improved earnings. The stock is currently undervalued, suggesting a positive short-term impact.
CONFIDENCE 85
IMPORTANCE 90
RELEVANCE 100