- BRF shares have jumped on news of Marfrig acquiring a 24% stake; the stake is "passive" for now, but a merger is possible.
- First quarter results showed increasing strain from input costs, as BRF raised prices meaningfully but still saw margin erosion on top of market share losses.
- Input costs are volatile and a known risk with food producers like BRF, but weaker near-term margins could delay long-term growth-driving capex spending.
- BRF shares are now a more borderline buy/hold for the short term, but the long-term potential of BRF's plan to boost margins and drive a more value-added sales mix is attractive.
For further details see:
BRF S.A. Boosted By A Strategic Investor, But Operating Conditions Are Challenging