The shares of Brazilian meatpacker Marfrig soared on Monday, after analysts at Jefferies raised the target price of the company’s shares from 25 reais to 27 reais.
Jefferies said the new estimate takes into account Marfrig’s near-term profitability potential, a still tight industry capacity and the company’s discounted valuation of US-based protein players.
“Given the continued positive operating environment and potential for profitability, a clean balance sheet and a discounted valuation, we continue to favor equities. We reiterate the purchase”, say Jefferies analysts.
They see Marfrig’s balance sheet in “much better position” compared to three years ago, while its valuation is “considerably discounted” against US-based peers.
Marfrig’s shares rose 4.2% to 23.37 reais in the morning trading session, the biggest increase on the Bovespa index, which was down 0.4%.
(By Gabriel Araujo)
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