BRF shares tumbled on Thursday (11), even after quarterly results showed operational improvement above market forecasts, with analysts pondering that there is still room for the company to go through before reaching normalized profitability levels.
At 1:13 pm (Brasília time), BRF ON fell 10.49% to R$15.36, the worst performance among Ibovespa shares, which rose 0.16%. At the worst moment, the shares reached R$ 15.05. In the year, the share accumulates a decline of more than 30%.
The adjusted earnings before interest, taxes, depreciation and amortization (Ebitda) of the food company reached R$ 1.368 billion in the period from April to June, up 7.7% in the year and above expectations of R$ 1.202 billion.
Even so, it had a net loss of R$468 million, with a worse-than-expected performance, impacted by two non-recurring events in the quarter: debt designated as “hedge accounting” and hyperinflation in Turkey.
Analysts at XP Investimentos called the results positive but “dubious”, noting that the company showed a solid improvement in the second quarter helped by a weaker comparative base in the first quarter, but also growing in revenue and Ebitda year on year.
However, in a report to clients, they highlighted that the sector’s margins have been steadily improving since March, with lower feed prices – corn and soybean meal – and higher prices for chicken meat.
“Therefore, despite the higher-than-expected adjusted Ebitda, we see the strategy of ‘adjusting the production chain and the balance of inventories’ in the first quarter leaving a bitter aftertaste, despite the clear benefit of the hindsight bias”, said Leonardo Alencar and Pedro Fonseca.
The XP team also added that while fundamentals have improved for BRF following the accommodation of feed prices, along with increased demand and higher prices, “a turnaround is often much deeper and takes longer than it appears to be. first sight”.
Analysts at Itaú BBA also assessed that the worst seems to be over for the company, which signals that it is on the right track to deliver a sequential recovery in profitability. But they pointed out that there is more space to go before BRF reaches normalized profitability levels.
Gustavo Troyano and team classified the company’s turnaround after the results of the first quarter of 2022 as “impressive”, but assessed that a significant part of the improvement in the quarterly basis was already expected by the market. Itaú BBA has a ‘neutral’ recommendation for the shares.
A little more optimistic, Bradesco BBI analysts who have an “outperform” recommendation for the shares, stated that the results should continue to improve sequentially
Leandro Fontanesi and Victor Romano cite the prospect of strong Brazilian chicken exports, due to cases of avian flu in Europe and the United States, which may keep the global supply of chicken low and support the exchange of more expensive proteins, such as beef, for chicken.
They also see a downward trend in grain costs, given rising US interest rates, weakening Chinese demand for grain and lower oil prices.
Source: CNN Brasil
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