Investing.com – BTG bank (BVMF:) decided to downgrade Minerva’s (BVMF:) recommendation to neutral, with a target price of R$8, reflecting the greater risks for the company, in the opinion of its analysts.
According to analysts Thiago Duarte and Henrique Brustolin, 2023 and 2024 should be Minerva’s shining years, with benefits “from a favorable commodity cycle, with an ample supply of cattle and the opening of new export markets for Brazil”. However, the report mentions the acquisition of 16 factories from Marfrig (BVMF:) by Minerva for R$7.5 billion, indicating execution risk.
Are you thinking about investing in companies in the refrigerator sector? Which can go up the most? Know how InvestingPro! Prices up to 40% OFF TODAY only, and get EXTRA discount with the coupon INVEST.
“However, we believed there was compelling strategic value in Minerva becoming a truly leading global beef trading company. As time passed, approval of the deal was delayed, and we learned that the price would be even higher due to interest rates from March/24 onwards. Initial reactions from antitrust bodies in Brazil and Uruguay suggest that approval may come with solutions that could make the business less attractive economically”, they detail.
BTG points out that, even if the company’s projections on operational indicators are correct, leverage could reach a much less comfortable level. Thus, the company would have gone “from a clear deleveraging story to a leveraged story, just as some cost tailwinds (namely the favorable cattle cycle) are about to start reversing sometime in late 2024/early 2025”.
Third-party advertising. It is not an offer or recommendation from Investing.com. Read our guidelines here or
remove ads
.
Minerva on InvestingPro
Minerva tends to be profitable this year, but analysts expect lower sales, according to the InvestingProInvesting.com’s premium platform. Protips, artificial intelligence (AI) insights based on fundamental indicators, which bring bearish and bullish perspectives to companies, also indicate that the company would have liquid assets that exceed obligations in the short term.
Minerva’s financial health is considered to be performing well, with a score of three, on a metric that ranges from one to five.
The company’s fair price is estimated at R$7.25, according to eleven investment models. The target of ten analysts is more optimistic, at R$9.98.
Do you want to invest in companies in the meatpacking sector like Minerva, but are you looking for more data about them? To have access to the financial models referring to the fair price indicated in the InvestingProhistorical financial statements, dividend return, price-to-earnings ratio and comparison with peers of all Brazilian companies, in addition to more than 135,000 shares from around the world, access the platform!
Outperform the market with the best insights with up to 40% off at InvestingPro! For an EXTRA discount, use the coupon INVEST for Pro and Pro+ annual and 2-year subscriptions
See how to apply the coupon in the video below
Tags: BTG downgrades stock neutral Investing .com
--
