BofA/Merrill Lynch Upgrades Arcos Dorados Holdings (ARCO) Two-Notches to Buy

BofA/Merrill Lynch upgraded Arcos Dorados Holdings (NYSE: ARCO) from Underperform to Buy with a price target of $14.00 (from $8.00), citing Venezuela rent cap change, new cost efforts, sub-franchising.

Analyst Robert E. Ford Aguilar said, "We reflect the adoption of SICAD II in Venezuela for ‘14, and a portion of incremental efficiency improvements we believe ARCO capable of in ‘15. Recent modification of Venezuelan rent law could enable more equitable economic adjustments with ARCO franchisees."

The firm cut 2014E EPS from $0.27 to $0.09, and raised 2015E EPS from $0.41 to $0.48.

For an analyst ratings summary and ratings history on Arcos Dorados Holdings click here. For more ratings news on Arcos Dorados Holdings click here.

Shares of Arcos Dorados Holdings closed at $9.61 yesterday.

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