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On Thursday, BMO Capital Markets updated its financial outlook on JBS SA (JBSS3:BZ) (OTC: OTC:JBSAY), increasing the price target from R$48.00 to R$52.00 while maintaining an Outperform rating. The adjustment follows the release of JBS’s fourth-quarter earnings, which reported an EBITDA of R$10.8 billion, surpassing both BMO’s and the consensus estimates of R$10.5 billion and R$9.85 billion, respectively. According to InvestingPro data, JBS has demonstrated strong momentum with a 68.73% return over the past year, while maintaining a conservative valuation with a P/E ratio of 9.13.
The strong performance was attributed to the positive momentum in JBS’s Seara and PPC divisions. Despite JBS’s practice of not providing earnings guidance, the company’s commentary on its outlook was positive. BMO highlighted JBS’s robust pipeline of internal projects aimed at driving margin expansion over time. InvestingPro analysis indicates the company maintains a "GREAT" financial health score of 3.06, with net income expected to grow this year. For detailed insights and 15 additional ProTips about JBS, subscribers can access the comprehensive Pro Research Report.
BMO reiterated its Outperform rating on the stock, citing several factors for the optimistic stance. The firm increased its 2025 EBITDA estimates for JBS and raised the price target to R$52. This target is based on a discounted cash flow valuation of 5.0x-5.5x the firm’s projected 2025 EBITDA for JBS, which is still below the historical valuation of Tyson Foods (NYSE:TSN) at approximately 7.5x.
The report also mentioned that JBS is well-positioned to benefit from strong industry fundamentals, strategic internal actions, and potentially lower barriers to its planned US listing. According to BMO, the timing for JBS’s US listing could be as early as the third quarter of 2025.
In other recent news, JBS announced the acquisition of a 48.5% stake in Mantiqueira, a leading egg producer in Brazil, along with 50% of its voting shares. This strategic move positions JBS as a co-controller of Mantiqueira, which has a significant presence in both the domestic and international markets. The transaction is valued at an Enterprise Value of BRL 1.9 billion for the entire company. Analysts at Itau BBA estimate Mantiqueira’s revenue to be around BRL 2.0 billion, which is expected to contribute approximately 0.5% to JBS’s projected net revenues for FY25. The acquisition is anticipated to generate immediate synergies, particularly in grain purchases, and may lead to further consolidation in the egg industry. Itau BBA has maintained its Outperform rating on JBS, reiterating a price target of R$51.00. The firm expresses confidence in JBS’s strategic growth following this acquisition, highlighting the potential benefits and minimal impact on the company’s leverage. These developments reflect JBS’s ongoing efforts to expand its footprint in the protein supply market across various categories and regions.
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