BRFS - BRF S.A. Has Stabilized Its Business And Investors Await The Next Act
2024-04-04 12:13:17 ET
Summary
- Successful operational improvement initiatives and improving free cash flow have led to strong performance from BRF S.A. shares.
- The company has achieved significant improvements in feed conversion, meat yields, plant efficiency, logistical execution and retail in-store positioning.
- Competition from JBS in Brazil is a concern, but BRF's branded share has held up well and the company has continued to build share in key markets outside of Brazil.
- I expect the Street to be very focused on management commentary about further margin improvement prospects with the upcoming quarterly report.
- Near-term upside looks more "good" than "great," but there are certainly avenues to greater gains if mid-teen EBITDA margins become a sustainable reality.
Writing about BRF S.A. (BRFS), a year ago, I talked about the opportunities for the management of this leading Brazilian food producer to drive meaningful operational improvements, as well as the risks that costs and export prices may not go in their favor. As it turned out, management executed well on costs and operational improvements and benefited from input cost tailwinds as the year, sending the ADRs up around 140% since that last article ....
BRF S.A. Has Stabilized Its Business, And Investors Await The Next Act