In the first quarter of 2024, BRF (BRFS3) achieved a historic turnaround, reporting exceptional results that exceeded analyst expectations and lifted investor sentiment.
The company recorded a net profit of R$594 million, reversing a R$1.024 billion loss from Q1 2023. Its net revenue reached R$13.378 billion, up 1.5% from the previous year.
Adjusted EBITDA climbed by 248.8% to R$2.117 billion, resulting in a 15.8% margin, 11.2 points higher than a year ago.
However, this impressive performance led BRFS3 shares to rise 11.17%, closing at R$18.51.
In response, Bank of America upgraded BRF’s rating from “underperform” to “neutral,” raising its target price from R$15.30 to R$19.
They attributed the growth to higher international poultry prices and falling feed costs, improving profitability.
XP Investimentos acknowledged BRF’s strong international operations, particularly in the Middle East and North Africa (MENA) regions, and a stable domestic market.
The investment firm noted that Q1 results surpassed their projections by 17%, reinforcing its buy recommendation and naming BRF its top pick in the protein sector.
Itaú BBA highlighted BRF’s adjusted EBITDA, which exceeded even optimistic expectations by 22%, led by a 47% increase in the international segment’s adjusted EBITDA.
Goldman Sachs cited BRF’s EBITDA as being 24% above their forecast, mainly due to strong Middle Eastern demand and improved operational efficiencies.
BTG Pactual attributed BRF’s success to favorable commodity cycles, robust management, and fewer competitive challenges.
The firm sees sustained positive momentum and expects further earnings growth in 2024.
Despite this positive outlook, analysts remain cautious about cyclical trends and the effects of supply adjustments on margins. They emphasize efficiency initiatives to support consistent growth.