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On Monday, Barclays (LON:BARC) analyst Benjamin Theurer announced an upgrade of Marfrig Global Foods SA (MRFG3:BZ) (OTC:MRRTY) stock rating from Equalweight to Overweight, accompanied by an increase in the price target from R$20.00 to R$30.00. Theurer’s optimism stems from Marfrig’s proposed merger to acquire the remaining 47% of BRF, which he believes will transfer the upside previously seen in BRF shares to Marfrig. Theurer anticipates the merger will receive approval due to the current ownership structure of each company.
Theurer expects that the merger will enable Marfrig to achieve cost savings through synergies, such as optimized cross-selling and headcount. These factors contribute to the positive outlook and support the significant increase in the stock’s price target. Theurer also points out the potential long-term benefits for Marfrig, including the possibility of a U.S. listing, which has been discussed by management in light of Marfrig’s relationship with North America-based National Beef.
Marfrig’s strategic move to acquire BRF is seen as a step that could reshape the company’s financial landscape, as it would eliminate a substantial portion of minority interest from its valuation. This acquisition is expected to streamline operations and bolster Marfrig’s market position.
Theurer’s confidence in the deal’s approval and the anticipated synergies suggests a robust future for Marfrig. The potential U.S. listing, as mentioned by management, could further enhance the company’s visibility and attract a broader investor base.
The upgraded rating and revised price target reflect Barclays’ positive assessment of Marfrig’s growth prospects, particularly in the wake of the proposed merger with BRF. Investors will be watching closely as the company moves forward with its strategic plans and aims to capitalize on the potential synergies and expansion opportunities.
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