By Chris Katje: This past week, Morgan Stanley (MS) downgraded shares of Arcos Dorados (ARCO) due to slower top line growth. Shares of the largest McDonald's (MCD) franchisor are trading down around 11% from when Morgan Stanley cut shares.
Business
Arcos Dorados is the leading quick service restaurant company in Latin America. In 2010, the company accounted for 5.1% of McDonald's' entire global sales. McDonald's had a 10.4% market share in Latin America, compared to 3.3% and 2.3% for Burger King and Subway respectively. McDonald's' market share eclipsed the 9.7% held by the next five restaurant companies.
The countries in which Arco Dorados operates in enjoy growing populations and a growing young middle class demographic. During the Morgan Stanley Consumer Conference in November, Arcos Dorados made a presentation to highlight the growth possibilities.
In the United States, the percent of population in the 15-34 age demographic is 27.4%. In Arcos operating regions, the
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