From the operational prism, BTG is not confident that the cycle of exceeding expectations for JBS remains in 2025 (Photo: JBS Disclosure)
THE JBS (JBSS3) He had his double listing process approved last Friday (23) after assembly with shareholders.
After the bureaucratic processes, the actions are expected to be negotiated in the B3 on June 6 and begin to be negotiated in the Nyse on June 12th. BDR is due to be negotiated on June 9.
The company sees the double listing as a way to reach a wider base of investors and as a step required to close the gap valuation in relation to its American peers, such as the Tyson Foods and your subsidiary Pilgrim’s Pride Corporation (PPC).
For the BTG Pactualthe question is the one ahead. “For a US JBS, we believe that the investment narrative will change the focus of the current moment of profits and pass, perhaps for the first time since the IPO, to focus more on the potential for repriction of its multiples. Currently, we see JBS being negotiated at 5.5x EV/EBITDA projected for 2025,” says Thiago Duarte, Guilherme Gutilla and Gustavovo Fabris.
For analysts, while closing the gap with Tyson requires more than just a change of address, in the short term it seems reasonable to expect JBS to negotiate at least in line with its PPC subsidiary.
“If JBS would reduce the gap For the multiples of PPC and Tyson, we estimated that this would imply a 33% and 84% appreciation, respectively. Each 1x increase in the company’s EV/EBITDA multiple represents a 40%appreciation potential. In the medium and long term, it will be necessary to consider other elements before projecting a complete process of restoration of the company. ”
JBS after double listing
The bank comments that the expectation is that JBS seeks inclusion in reference rates such as Russell 1000 and S&P 500, which would further increase the visibility of actions, especially between passive funds, although this does not happen immediately.
Another important factor is the company’s performance in the prepared food segment. “Tyson herself was negotiated with multiple JBS similar to 2014, when she acquired Hillshire Brands, significantly increasing her exposure to more margin -prepared foods and boosting the appreciation of her multiples.”
Analysts believe that JBS should follow a similar path, both organically and through acquisitions – especially now that the possibility of issuing supervote actions allows J&F to raise capital for growth without diluting control (J&F will deter about 88% of voting power in JBS NV).
What to expect in the coming years?
From the Operational Prism, BTG is not confident that the 2024 POSITIVE EXPECTATIONS AND POSITIVE REVIEW CYCLE is repeated in 2025. Looking at 2026, they believe that JBS will enter a simultaneous pressure cycle in some divisions. ”
“If history is repeated, the margins of the bird segment will eventually begin to give in, and although a recovery in the US beef sector still seems distant, JBS Brazil should also begin to feel the first signs of a low -livestock cycle in the country.”
Nevertheless, the bank still praises the company’s investment thesis for the coming months, because the company continues to show a good time in terms of profits.
“We also consider the fact that we believe there is room for additional reprecification after the US listing is completed, which may close the valuation gap over PPC. We maintain our purchase recommendation (target price of $ 48 and high potential of 20.48%).”
Source: Moneytimes
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