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America is proving a tough nut to crack for the Brazilian meat giant, JBS S.A., but heavyweight financiers predict a breakthrough.
The company’s CFO, Guilherme Cavalcanti, revealed plans to canvass holders of American depositary receipts for their verdict on the proposed listing, yet the outfit is still dancing to the tune of U.S. regulators and lawmakers before tabling its blueprint for a vote. JBS S.A. presently faces barrages from no fewer than 15 senators, comprising the likes of Democratic firebrand Elizabeth Warren, and Republican heavyweights Marco Rubio and Josh Hawley.
The tale of the embattled outfit’s dual listing scheme was made public a year prior. JBS S.A.’s CEO, Gilberto Tomazon, contended that a dual listing was the key to turbocharging the company’s ability to diversify and pioneer an array of branded and value-added rations. Furthermore, Tomazon was sanguine that such a move would drive down the cost of capital and deliver fatter dividends for stakeholders as well as open doors for the neighborhoods in which the conglomerate holds sway. JBS boasts a sprawling, international web of food production operations, with presence and commercial bureaus in 24 nations, and an excess of 330,000 clients spread across 190 countries. The conglomerate’s roots go back some 70 years in its Brazilian birthplace, where nearly 60% of its global corps; more than 130 factories, pepper the terrain. JBS holds substantial interests in North America, Europe, the UK, Australia, and New Zealand.
Away from the wrangles, BMO Capital is singing hosannas, tipping JBS S.A.’s shares in Brazil for an Outperform rating. According to their analyst, Andrew Strelzik, the company’s sundry collection of assets offers compelling upside prospects, punctuating the potential for broadening horizons across JBS S.A.’s emporium, and a plethora of openings to expand its portfolio. Similarly, Truist Securities is first in line with a Buy rating for JBS S.A.’s anticipated U.S. listing, coupled with an auspicious 12-month price target of $14. The brokerage house’s upbeat prognosis is rooted in JBS riding the crest of the global protein surge, the anticipated reboot of commodities markets post the pandemic era, and the realization of JBS’ battle-tested stratagem of enriching M&A and sustainable natural growth. Truist is banking on the U.S. listing to come to fruition in the early months of 2024, with stock poised to hog the limelight. Their researcher, Bill Chappell, lent credence to the gambit. “Given the company’s revenue base, market cap, and the paucity of similar corporations, we envisage at least one index will court JBS within the debut year, with likelihood of being admitted to the S&P 500 index within 1-2 years.”
JBS Foods S.A. is waiting in the wings to go public, bearing a $11 billion market cap, which pales in comparison to the market caps of Archer Daniels Midland (ADM) at $37.1 billion, Bunge Global S.A. (BG) at $13.9 billion, and Tyson Foods (NYSE: TSN) at $15.7 billion, but eclipses BRF S.A. (BRFS) at $4.45 billion and Pilgrim’s Pride (NASDAQ: PPC) at $6.7 billion.
