Wednesday, July 4, 2018

BRF's Initial Restructuring Moves Focused On Slimming Down

Considering how Pedro Parente, the new CEO of BRF SA (BRFS) approached the turnaround of Petrobras (PBR), the initial moves outlined late on Friday June 29 shouldn't be a major surprise to investors. Whether a series of initial asset disposals and restructuring efforts will achieve the monetary target won't be known for a while, it does seem like a cogent approach to getting this struggling Brazilian food company back on track.

The equity call remains more or less the same as it was before - you either believe that Parente will lead a meaningful turnaround here (though it may take a couple of years) or you believe this company is too far gone to be fixed and eventual bankruptcy is the ultimate destination. At this point I believe Parente deserves the benefit of the doubt, and that BRF's strong domestic share in Brazil's processed meat market is worth something, but the stock's slide wasn't interrupted in any meaningful way by the hiring of Parente, and there remains a lot of work to do.

Follow this link for the full article:
BRF's Initial Restructuring Moves Focused On Slimming Down

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