Top 10 LatAm Ideas Quarterly: Top 10 LatAm Ideas Quarterly for 3Q26

研报英文原文证据摘录

Top 10 LatAm Ideas Quarterly: Top 10 LatAm Ideas Quarterly for 3Q26

Arcos Dorados – Buy

We add Arcos Dorados (ARCO US), the world's largest McDonald's franchisee, to our

quarterly ideas. The shares trade at about 11x 2026E EPS, and we forecast a 17%

growth 5-year CAGR in USD. The company has exclusive rights to operate or sub-

franchise restaurants in over 20 countries in Latin America and the Caribbean. Its

digitalization and customer relationship management (CRM) efforts (app adoption, data

analytics) are also believed to be superior to most regional peers.

3Q Investment thesis: Chicken strips, crafted beverages, aggregators and strong

World Cup offers

Arcos Dorados launched World Cup promotions in early April with country-themed

sandwiches and flavors. Additions are believed to be margin accretive, drive frequency

and fund a more aggressive affordability platform, and more than offsetting any short-

term adverse impact from World Cup games. Greater use of app-only deals also

leverages data and drives identified sales rates. While restaurants typically lose out

during the tournament, ARCO may be able to offset game-time traffic losses with

collectible cups, pins and a series of Squishmallow plushy enticements. ARCO also

appears to be benefitting from new delivery entrants, reducing commissions and

improving consumer value propositions. Lastly, regional pilots in crafted beverages and

McCrispy chicken strips appear successful and may presage much broader availability.

We expect the new menu additions to drive traffic, expand margin and further diversify

Arcos from the rising beef prices.

BofA Global Research Reports

Title: Subtitle Primary Author Date Published

Arcos Dorados: Strengthening into World Cup, room for Robert E. Ford Aguilar, CFA 15 June 2026