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Best slaughterhouse to invest in 2023 brings duel between JBS (JBSS3) and Minerva (BEEF3), says Itaú

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Best slaughterhouse to invest in 2023 have discounted shares and good spread on margins to export beef. (Image: Unsplash/Justus Menke)

The last results season referring to the third quarter of 2022 left clues about what should be the best fridge to invest in 2023. For the Itaú BBAthe duel is among the actions of JBS 🇧🇷JBSS3) and Minerva Foods 🇧🇷BEEF3🇧🇷

Both refrigerators boast purchase recommendationaccording to analyst Gustavo Troyano, but the reasons that put companies in the spotlight in 2023 are different.

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O BTG Pactual also highlighted that among the four large slaughterhouses listed on the B3, one of them is in an excellent point of entry for the investorabout to shoot up to 63% in the coming months.

Refrigerator with discounted shares

JBS has target price of BRL 54 and potential of 110% appreciation in up to one year, according to the manager. In the last 12 months, the company had a drop of almost 12% in market value.

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the fridge had record results in the third quarter and added adjusted Ebitda of R$ 9.54 billion, an important indicator for monitoring cash generation.

A company with healthy cash generation has room to distribute good dividends to its shareholders. In this case, JBS intense recovery of cash generation to R$ 3.2 billion, making room for the distribution of billionaire dividends🇧🇷

“For 2023, we still see the actions of the JBS trading at an unfair market discountwith an excellent cash generation capable of remedying the impacts with the turnaround in cattle margins in the United States”, evaluates Troyano.

The reductions in the costs of grains used for animal feed also help the slaughterhouse close accounts, promoting the improvement of chicken margins after nine months of decline.

Cheap ox in 2023 helps this action

Itaú BBA estimates target price of $20 for Minerva’s shares, implying in the 57% upside potential within one year🇧🇷 In the last 12 months, the company’s shares appreciated by 48%.

The manager reiterates that the Brazilian slaughterhouse, with the largest presence in South America, still has a lot of value to unlock for shareholders, taking into account prospects for cheaper prices for cattle in 2023🇧🇷

“This week’s export data showed a 4% drop in commodity prices. beef sold abroad for US$ 5.2 per kilo, the lowest level since January. The downward trend has been consolidated since September. This is good news for Minerva”, explains Troyano.

If the decline in beef prices is confirmed in 2023, Minerva’s export margins should remain above the historical average, supporting expectations of improvement in the slaughterhouse’s profitability.

The company comes from a harvest of positive results, with the company’s slaughter volume growing 3.5% to 983.9 thousand head of cattle in the third trimester.

The increase in the availability of animals ready for slaughter in South America (including the Brazil), combined with the restriction on the North American supply of beef over the coming years, provide unique opportunities for South American exporters.

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Source: Moneytimes

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