JBS SA
BOVESPA:JBSS3
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Intrinsic Value
The intrinsic value of one JBSS3 stock under the Base Case scenario is 51.3 BRL. Compared to the current market price of 35.65 BRL, JBS SA is Undervalued by 31%.
The Intrinsic Value is calculated as the average of DCF and Relative values:
Valuation Backtest
JBS SA
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Fundamental Analysis
Economic Moat
JBS SA
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JBS SA, founded in 1953 in Brazil, has grown to become one of the world’s largest food companies, specializing in the production of beef, poultry, and pork. Over the decades, the company has strategically expanded its operations both domestically and internationally, with facilities in several countries across the Americas, Europe, and Australia. JBS's commitment to sustainability and innovation, paired with its robust supply chain management, has positioned it as a key player in the global protein market. This overarching strategy not only supports JBS's vast product offerings—ranging from fresh cuts to processed foods—but also reflects its adaptability in meeting evolving consumer demands...
JBS SA, founded in 1953 in Brazil, has grown to become one of the world’s largest food companies, specializing in the production of beef, poultry, and pork. Over the decades, the company has strategically expanded its operations both domestically and internationally, with facilities in several countries across the Americas, Europe, and Australia. JBS's commitment to sustainability and innovation, paired with its robust supply chain management, has positioned it as a key player in the global protein market. This overarching strategy not only supports JBS's vast product offerings—ranging from fresh cuts to processed foods—but also reflects its adaptability in meeting evolving consumer demands and market trends.
For investors, JBS represents a compelling opportunity within the food sector, as it benefits from the growing global appetite for protein. The company’s diverse portfolio and extensive distribution networks enable it to navigate market fluctuations effectively. Furthermore, JBS is investing heavily in technology and sustainability initiatives, aiming to enhance operational efficiency and reduce environmental impact, which is increasingly important to consumers and institutional investors alike. With its strong financial performance, a commitment to responsible practices, and strategic growth plans, JBS SA embodies the qualities of a resilient and forward-thinking enterprise in the ever-dynamic food industry landscape.
JBS S.A. is one of the largest food companies in the world, primarily known for its meat processing operations. The company operates through several core business segments, each contributing to its overall revenue and market presence. Here’s an overview of JBS’s primary business segments:
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Beef Segment:
- This segment involves the processing of beef products, which is a significant part of JBS’s operations. The company sources cattle and processes them into various beef products, including fresh cuts, processed meats, and by-products. JBS is a leading player in both domestic and international beef markets.
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Pork Segment:
- In addition to beef, JBS has a robust pork processing division. This segment produces a wide range of pork products, from fresh pork cuts to processed products. The pork segment is significant for JBS, especially in North America and Brazil.
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Poultry Segment:
- This segment involves the production of chicken products. JBS is a major provider of poultry products, which include fresh and processed chicken products. The poultry segment has been a focus area for growth and expansion within JBS.
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Prepared Foods Segment:
- JBS has ventured into the prepared foods market, offering a variety of processed and ready-to-eat products. This includes items like sausages, ready meals, and other value-added food products that cater to consumer convenience.
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Leather Segment:
- In addition to its meat processing, JBS also processes hides and produces leather products. This segment utilizes by-products from its meat operations to supply the leather market, making it an important part of the company’s sustainability and waste management strategy.
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Plant-Based Proteins:
- Reflecting changing consumer preferences, JBS is expanding into the plant-based protein segment. This includes the development of meat alternatives and plant-based food items aimed at health-conscious consumers and those seeking meat alternatives.
These core business segments highlight JBS's diverse operations within the food production industry, its commitment to sustainability, and its adaptation to evolving consumer trends in the marketplace. Each segment plays a pivotal role in the company’s overall business strategy and revenue generation.
JBS SA, one of the largest food companies in the world, particularly in the meat processing industry, holds several unique competitive advantages over its rivals:
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Vertical Integration: JBS operates across the entire supply chain, from livestock sourcing and processing to retail. This vertical integration allows for greater control over production costs, quality, and supply chain logistics, which can minimize disruptions and enhance efficiency.
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Diverse Product Portfolio: JBS produces a wide variety of products, including beef, pork, poultry, and processed foods. This diversification mitigates risk associated with market fluctuations in specific sectors, allowing the company to capture a broader market share.
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Global Presence: With operations in various countries, JBS benefits from international market access and can leverage opportunities in different regions. This geographical diversification allows it to mitigate risks associated with economic downturns in any single country.
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Economies of Scale: As one of the largest producers in the world, JBS can achieve significant economies of scale, reducing per-unit costs and improving margin efficiency. This positions the company favorably against smaller competitors who may struggle with higher relative costs.
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Strong Brand Recognition: JBS has established well-known brands in various markets, which helps in customer loyalty and pricing power. Strong branding aids in attracting consumers who prioritize quality and reliability.
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Investment in Technology and Innovation: JBS has been investing in advanced technologies for processing, food safety, and supply chain management. These investments help improve productivity, ensure food safety, and enhance overall product quality.
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Sustainability Initiatives: With increasing consumer demand for sustainably produced food, JBS's efforts in sustainability, such as responsible sourcing and animal welfare, can provide a competitive edge in meeting regulatory requirements and consumer preferences.
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Access to Capital: As a large multinational company, JBS has better access to capital for expansion, acquisitions, and investments in new technologies compared to smaller competitors.
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Strategic Acquisitions: JBS has a history of growth through acquisitions, which has allowed it to expand its market presence and consolidate its position in various sectors. This strategy can lead to synergies and increased market share.
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Resilience in Supply Chain Management: JBS’s established relationships with suppliers and farmers enhance its resilience against supply disruptions, which is a significant advantage in an industry susceptible to fluctuations in raw material availability.
These competitive advantages enable JBS SA to maintain a strong position in the global meat processing market and effectively compete with its rivals.
JBS SA, one of the world's largest food processing companies, faces several risks and challenges in the near future. Here are some key factors to consider:
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Regulatory Compliance and Animal Welfare:
- JBS operates in multiple countries, each with its own regulations regarding food safety, labeling, and animal welfare. Stricter regulations could increase operational costs and lead to legal risks.
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Supply Chain Disruptions:
- The company is vulnerable to disruptions in the supply chain caused by global events, such as pandemics, political instability, or natural disasters. This can impact raw material availability, pricing, and logistics.
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Environmental Concerns:
- The meat industry, including JBS, faces significant scrutiny over its environmental impact, particularly related to deforestation, water usage, and greenhouse gas emissions. Increased pressure from consumers and policymakers could lead to higher operational costs or the need for more sustainable practices.
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Market Volatility and Price Fluctuations:
- Prices for beef, pork, and chicken can be volatile due to factors such as demand changes, disease outbreaks in livestock, and shifts in consumer preferences toward plant-based diets. Such volatility can impact profitability.
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Changing Consumer Preferences:
- There is a rising trend toward plant-based diets, health consciousness, and ethical consumption. JBS needs to adapt to these trends by diversifying its product offerings or risk losing market share.
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Competition and Market Position:
- The food processing industry is highly competitive, with several strong players. JBS must continue to innovate and maintain competitive pricing to secure its market position.
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Cybersecurity Threats:
- As with many large corporations, JBS is vulnerable to cyberattacks which can disrupt operations or compromise sensitive data. The company needs to invest in robust cybersecurity measures.
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Global Trade Policies:
- Changes in trade agreements and tariffs can affect JBS's international operations. Tariffs on beef exports, for example, can significantly impact profitability in key markets.
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Economic Conditions:
- Economic downturns can lead to reduced consumer spending on premium food products, directly impacting JBS’s sales and revenues.
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Labor Relations:
- Labor shortages or disputes may pose challenges, especially in maintaining operational capacity in processing plants.
By addressing these risks proactively through strategic planning, JBS can position itself to mitigate potential adverse effects and capitalize on emerging opportunities.
Revenue & Expenses Breakdown
JBS SA
Balance Sheet Decomposition
JBS SA
Current Assets | 83B |
Cash & Short-Term Investments | 20.5B |
Receivables | 22B |
Other Current Assets | 40.5B |
Non-Current Assets | 136.5B |
Long-Term Investments | 235.1m |
PP&E | 79.4B |
Intangibles | 42.3B |
Other Non-Current Assets | 14.6B |
Current Liabilities | 51.2B |
Accounts Payable | 17.5B |
Accrued Liabilities | 8B |
Other Current Liabilities | 25.6B |
Non-Current Liabilities | 122.2B |
Long-Term Debt | 106.3B |
Other Non-Current Liabilities | 15.9B |
Earnings Waterfall
JBS SA
Revenue
|
377.5B
BRL
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Cost of Revenue
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-328.2B
BRL
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Gross Profit
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49.3B
BRL
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Operating Expenses
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-34.6B
BRL
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Operating Income
|
14.8B
BRL
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Other Expenses
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-10.8B
BRL
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Net Income
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4B
BRL
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Free Cash Flow Analysis
JBS SA
BRL | |
Free Cash Flow | BRL |
In Q3 2024, JBS achieved record net revenue of $20 billion and adjusted EBITDA of $2.2 billion, up from the previous year, reflecting a robust 10.8% margin. The company announced a guidance revision for 2024, projecting net revenue of $77 billion and adjusted EBITDA between $6.9 billion and $7.1 billion. Net debt decreased by $1 billion to $13.7 billion, and free cash flow surged by 65% year-over-year to $1 billion. Notably, the Seara segment reported a remarkable 21% EBITDA margin, indicating strong operational performance. Upcoming dividends of approximately $382 million are set for January 2025, maintaining the company’s commitment to shareholder returns.
What is Earnings Call?
JBSS3 Profitability Score
Profitability Due Diligence
JBS SA's profitability score is 50/100. The higher the profitability score, the more profitable the company is.
Score
JBS SA's profitability score is 50/100. The higher the profitability score, the more profitable the company is.
JBSS3 Solvency Score
Solvency Due Diligence
JBS SA's solvency score is 34/100. The higher the solvency score, the more solvent the company is.
Score
JBS SA's solvency score is 34/100. The higher the solvency score, the more solvent the company is.
Wall St
Price Targets
JBSS3 Price Targets Summary
JBS SA
According to Wall Street analysts, the average 1-year price target for JBSS3 is 48.08 BRL with a low forecast of 43.33 BRL and a high forecast of 52.5 BRL.
Dividends
Current shareholder yield for JBSS3 is .
Shareholder yield represents the total return a company provides to its shareholders, calculated as the sum of dividend yield, buyback yield, and debt paydown yield. What is shareholder yield?
Profile
Country
Industry
Market Cap
Dividend Yield
Description
JBS SA engages in the processing of beef, pork, lamb, chicken, and also produces value added and convenience food products. The company is headquartered in Sao Paulo, Sao Paulo and currently employs 250,000 full-time employees. The company went IPO on 2007-03-27. The firm's activities are divided into five business segments: Brazil, Seara, JBS USA Beef, JBS USA Pork and PPC. The Brazil segment is responsible for the cattle processing; production and sale of byproducts, such as hides and leather; and production of products whose raw material comes from the slaughter by-products, such as biodiesel, collagen, and hygiene and cleaning. The Saera division focuses on the production and export of chicken and pork. The JBS USA Beef segment is engaged in beef, lamb and prepared foods production and distribution in the United States, Canada and Australia. The JBS USA Pork line is involved in the processing and distribution of pork. The PPC consists of operations of Pilgrims Pride Corp, which is engaged in chicken and pork processing. The firm operates in Brazil, the United States, Canada, Australia, the United Kingdom, France, Mexico, Argentina, and Paraguay, among others.
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Employees
Officers
The intrinsic value of one JBSS3 stock under the Base Case scenario is 51.3 BRL.
Compared to the current market price of 35.65 BRL, JBS SA is Undervalued by 31%.