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On Wednesday, Stephens initiated coverage on JBS SA (OTC:JBSAY) shares with an Overweight rating and set a price target of $22.00. The research firm cited the company’s broad international presence, diverse protein offerings, and prudent financial management as key factors in its positive assessment. With a market capitalization of $15.49 billion and an attractive P/E ratio of 8x, InvestingPro data shows JBS trading at compelling valuations. Stephens highlighted JBS’s ability to maintain a steady and diverse earnings stream, which is expected to benefit from operational enhancements and margin improvements in its Seara and U.S. Pork divisions.
Despite challenges posed by U.S. beef market dynamics, Stephens remains optimistic about JBS’s future performance. Supporting this view, InvestingPro data reveals impressive revenue growth of 20.65% over the last twelve months, with a robust dividend yield of 11.97%. The firm noted that historical mergers and acquisitions have led to a vertically integrated and geographically diverse business model for JBS, which helps to cushion the impact of regional and market-specific volatility.
Stephens also pointed to a potential U.S. stock market listing as a significant opportunity for JBS to achieve multiple expansions. The firm believes that JBS’s profile is strongly comparable to U.S. counterparts such as Tyson Foods (NYSE:TSN) and that a listing stateside could enhance the company’s valuation.
The research firm acknowledged that governance issues and broader market perceptions might warrant a modest valuation discount. However, Stephens anticipates considerable growth potential for JBS, supported by the company’s ongoing efforts to generate more free cash flow, decrease debt, and provide more consistent earnings across different economic cycles.
In other recent news, JBS B.V. and JBS S.A. have both filed Form 6-K with the U.S. Securities and Exchange Commission (SEC) for May 2025, ensuring compliance with U.S. financial regulations. JBS B.V.’s filing included significant corporate updates, such as resolutions from an Extraordinary General Meeting, highlighting the company’s commitment to transparency and adherence to international governance standards. Meanwhile, JBS S.A.’s submission is part of its routine disclosure practices, although it did not detail specific changes or events within the company. In another development, BMO Capital Markets has raised its price target for JBS S.A. to R$52, following the company’s strong fourth-quarter earnings report. JBS S.A. reported an EBITDA of R$10.8 billion, exceeding both BMO’s and consensus estimates. BMO maintained its Outperform rating on JBS S.A., citing the company’s robust internal projects and strategic positioning. The firm also noted potential benefits from JBS’s planned U.S. listing, which could occur as early as the third quarter of 2025. These developments reflect JBS’s ongoing efforts to strengthen its market position and financial performance.
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