Monday, November 19, 2018

BRF's Third Quarter Had A Few Positives

Brazil’s BRF SA (BRFS) is only just starting its turnaround process, so investors shouldn’t expect quick fixes or huge improvements in financial results right away. Likewise, I wouldn’t get too concerned about near-term challenges like a currency-driven jump in the debt ratio. Importantly, the two key profit centers (Brazil and the halal business) both had some positive news and results should improve in the coming quarters.

I continue to believe that fair value for BRF shares today is in the $6’s, but with upside into the double-digits in a couple of years if and when the company executes on its turnaround strategy. Success is far from guaranteed, though, and investors need to aware not only of the company-specific execution risks, but also the commodity and currency risks that impact this business.

Follow the link to read more:
BRF's Third Quarter Had A Few Positives

No comments: