BRF: Undervalued Yet Overperforming Brazilian Poultry Market Giant

2025-05-09 10:23:01 ET

Summary

• Brazil Foods' low valuation multiples and strong EBITDA growth present significant upside potential, despite recent share price recovery.
• The company has successfully reduced leverage, improved margins, and diversified its international market presence, benefiting from geopolitical tensions between the US and China.
• Strategic investments in processed food lines and brand leadership, particularly in Brazil and the Middle East, support sustainable growth and margin expansion ahead.
• In the long term, Brazil's competitive advantages in protein production, with good availability of corn and soybeans, favors BRF operational efficiency.
• The Brazilian equity market is attracting renewed attention from foreign investors, and interest-rate cuts are now possible. This could help BRF multiples.

A few months ago, I wrote “ Time to Buy Brazil ”, and so far, the trade has performed well—despite (or perhaps thanks to) the Trump-driven trade headwinds. I continue to research undervalued equities that could help surf this wave: BRF S.A. (BRFS) , one of the global protein giants, is one of them....

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