When deciding whether to buy, sell, or hold a stock, investors often rely on analyst recommendations. Media reports about rating changes by these brokerage-firm-employed (or sell-side) analysts often influence a stock's price, but are they really important? Before we discuss the reliability of brokerage recommendations and how to use them to your advantage, let's see what these Wall Street heavyweights think about BRF (BRFS) . BRF currently has an average brokerage recommendation (ABR) of 1.80, on a scale o ...

Company Performance - BRF (BRFS) closed at $3.45, showing a -0.58% change from the previous day's closing price, underperforming the S&P 500's daily gain of 0.08% [1] - Over the past month, BRF's shares increased by 4.2%, outperforming the Consumer Staples sector's gain of 1.88% and the S&P 500's loss of 7.33% [1] Earnings Projections - The upcoming earnings per share (EPS) for BRF is projected at $0.09, representing a 50% increase from the same quarter last year [2] - For the entire fiscal year, the Zacks Consensus Estimates predict an EPS of $0.44 and revenue of $10.97 billion, indicating increases of +22.22% and +0.25% respectively from the previous year [2] Analyst Estimates - Recent modifications to analyst estimates for BRF reflect shifting short-term business dynamics, with upward revisions indicating analysts' positive outlook on the company's operations and profit generation [3] Zacks Rank and Performance - The Zacks Rank system, which ranges from 1 (Strong Buy) to 5 (Strong Sell), shows that 1 stocks have generated an average annual return of +25% since 1988 [5] - BRF currently holds a Zacks Rank of 2 (Buy), with the consensus EPS estimate shifting 1.16% upward over the past month [5] Valuation Metrics - BRF is trading at a Forward P/E ratio of 7.98, which is a discount compared to the industry's average Forward P/E of 16.48 [6] - The company's PEG ratio is currently 0.19, significantly lower than the average PEG ratio of 1.91 for the Food - Miscellaneous industry [6] Industry Context - The Food - Miscellaneous industry, part of the Consumer Staples sector, has a Zacks Industry Rank of 162, placing it in the bottom 36% of over 250 industries [7] - Research indicates that the top 50% rated industries outperform the bottom half by a factor of 2 to 1 [7]

Core Viewpoint - The average brokerage recommendation (ABR) for BRF (BRFS) is 1.80, indicating a consensus between Strong Buy and Buy, with 60% of the recommendations being Strong Buy [2][4]. Brokerage Recommendations - The ABR is based on recommendations from five brokerage firms, with three firms giving a Strong Buy rating [2]. - Despite the positive ABR, reliance solely on brokerage recommendations may not be advisable, as studies indicate they often fail to guide investors effectively [4][9]. Analyst Bias - Brokerage analysts tend to exhibit a strong positive bias due to their firms' vested interests, leading to a disproportionate number of Strong Buy recommendations compared to Strong Sell [5][9]. - This misalignment of interests can mislead retail investors regarding future stock price movements [6]. Zacks Rank Comparison - Zacks Rank is a proprietary tool that categorizes stocks based on earnings estimate revisions, providing a more reliable indicator of near-term stock performance compared to ABR [7][10]. - The Zacks Rank is updated more frequently and reflects timely changes in earnings estimates, unlike the potentially outdated ABR [11]. Earnings Estimates for BRF - The Zacks Consensus Estimate for BRF has increased by 1.2% over the past month to $0.44, indicating growing analyst optimism about the company's earnings prospects [12]. - This positive trend in earnings estimates has resulted in a Zacks Rank of 2 (Buy) for BRF, suggesting a favorable outlook for the stock [13].

Investors with an interest in Food - Miscellaneous stocks have likely encountered both BRF (BRFS) and Conagra Brands (CAG) . But which of these two stocks offers value investors a better bang for their buck right now? We'll need to take a closer look.We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great grade in the Value category of our Style Scores system. The Zacks Rank is a proven strategy that targets companies with positive earnings estimate ...

Financial Data and Key Metrics Changes - The company reported a net revenue of BRL 61.4 billion, which is 14% higher than in 2023 [9] - EBITDA reached BRL 10.5 billion, more than double the previous year's performance, contributing to a net profit of BRL 3.7 billion [10] - Free cash flow performance was BRL 6.5 billion, marking an all-time record [10] - The leverage ratio improved to 0.75 times EBITDA in the last 12 months, down from 2 times in 2023 [10] Business Line Data and Key Metrics Changes - In Brazil, the company achieved an EBITDA margin of 15.5%, with growth in volume, particularly in processed product categories [12] - The international market saw an EBITDA margin exceeding 20% in 2024, with strong performance in Turkiye and the Gulf area [14] - The ingredients and pet products segment reported BRL 422 million in EBITDA, with increased participation of value-added items [17] Market Data and Key Metrics Changes - The domestic market showed a significant increase in sales and market share, with 327,000 customers served [26] - The international segment benefited from high export prices and a growing contribution from processed products in halal markets [15] Company Strategy and Development Direction - The company aims to continue diversifying markets and maximizing revenues while focusing on sustainable growth [29] - The BRF+ efficiency program has captured approximately BRL 4 billion in operational efficiencies since its launch [27] - The company is committed to maintaining a high-performance culture and valuing its employees [30] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenges posed by inflation and cost pressures in 2025 but expressed confidence in the company's ability to navigate these challenges [35][46] - The company expects a favorable consumption environment for value-added products in Brazil, supported by strong consumer confidence [52] - January 2025 started strong, indicating a positive trend for the year ahead [47] Other Important Information - The company has established 175 new export permits, enhancing its ability to maximize prices [16] - Sustainability initiatives include achieving 100% traceability of grain suppliers and reducing water consumption by over 11% [21] Q&A Session All Questions and Answers Question: Insights on 2025 dynamics and inflation impact on processed products - Management highlighted the importance of information access and operational efficiencies in navigating challenges, with a focus on value-added products performing better in favorable consumption scenarios [41][42][46] Question: Pricing strategies for processed products in Brazil - Management noted a balanced relationship between supply and demand, with expectations for price increases in processed products, while also monitoring regional market dynamics [56][62] Question: Context on BRF+ program and operational efficiency - Management confirmed that BRF+ is a continuous improvement program with room for further enhancements, focusing on synergy across different areas of the company [70][76] Question: Breakeven expectations and capital allocation for expansion projects - Management indicated strong free cash generation and plans to allocate resources for expansion projects, particularly in processed products [78][80] Question: Sequential drop in margins in Brazil - Management clarified that the margin drop was primarily due to non-recurrent costs related to provisions and variable compensation, rather than pricing issues [88][90] Question: Inorganic growth and recent acquisitions - Management discussed the strategic rationale behind recent acquisitions, emphasizing the potential for higher profitability and resilience against commodity price fluctuations [118][120] Question: Inventory levels and grain cost dynamics - Management explained that inventory levels increased due to seasonal sales, while also highlighting a reduction in finished product inventory as part of efficiency efforts [138][140]

Financial Performance - Net Revenue reached R$61379 million in 2024, a 14% increase compared to R$53615 million in 2023[10] - Adjusted EBITDA reached R$10508 million in 2024, a 123% increase compared to R$4721 million in 2023[10] - Free Cash Flow reached R$6524 million in 2024, compared to a negative R$1869 million in 2023[10] - Net Income was R$3692 million in 2024, a significant improvement from a loss of R$1105 million in 2023[10] Leverage and Indebtedness - Leverage (Net Debt / LTM Adjusted EBITDA) decreased to 079x in 4Q24 from 201x in 2023[9, 10] - Net Debt decreased from R$9475 million in 4Q23 to R$8325 million in 4Q24[57] Segment Performance - Brazil segment saw substantial volume growth focused on Processed products, resulting in market share gains, with Adjusted EBITDA Margin increasing to 155% in 2024 from 114% in 2023[15, 16] - International segment achieved record profitability, with Adjusted EBITDA reaching R$5706 million and Adjusted EBITDA Margin at 202% in 2024[31, 32] Efficiency and Strategy - BRF+ 20 efficiency program captured additional savings of R$15 billion in 2024[65] - The company achieved 100% monitoring of grain suppliers, ahead of schedule[51]

Financial Statements, Individual and Consolidated | 2024 a 2023 | Índex | | | --- | --- | | Índex | 2 | | Statements of Financial Position | 4 | | Statements of Income (Loss) | 5 | | Statements of Comprehensive Income (Loss) | 6 | | Statements of Changes in Equity | 7 | | Statements of Cash Flows | 8 | | Statements of Value Added | 9 | | Management Report | 10 | | 1. Company's Operations | 47 | | 2. Basis of Preparation and Presentation of Financial Statements | 51 | | 3. Material Accounting Policies | 52 | ...

Group 1 - BRF's stock closed at $3.33, down 1.19% from the previous session, underperforming the S&P 500's loss of 0.43% [1] - Over the past month, BRF shares have decreased by 9.41%, while the Consumer Staples sector saw a minimal loss of 0.05% and the S&P 500 gained 2.6% [1] Group 2 - The upcoming earnings release for BRF is anticipated, with projected EPS at $0.15, indicating stability year-over-year, and revenue expected to reach $2.74 billion, reflecting a 61.67% increase compared to the same quarter last year [2] - Recent changes in analyst estimates for BRF are important, as upward revisions indicate positive sentiment regarding the company's business operations and profit generation capabilities [3] Group 3 - The Zacks Rank system, which evaluates estimate changes, currently ranks BRF at 2 (Buy), with a historical average annual return of +25% for stocks rated 1 since 1988 [5] - BRF's Forward P/E ratio is 7.84, significantly lower than the industry average of 16.06, and its PEG ratio stands at 0.19, compared to the industry average of 2.66 [6] Group 4 - The Food - Miscellaneous industry, which includes BRF, has a Zacks Industry Rank of 181, placing it in the bottom 28% of over 250 industries, indicating weaker performance compared to higher-ranked industries [7]

Core Viewpoint - The comparison between BRF (BRFS) and Kerry Group PLC (KRYAY) indicates that BRFS is currently a more attractive option for value investors due to its stronger earnings outlook and favorable valuation metrics [1][3][7]. Valuation Metrics - BRFS has a forward P/E ratio of 8.51, significantly lower than KRYAY's forward P/E of 19.52, suggesting that BRFS is undervalued relative to its earnings potential [5]. - The PEG ratio for BRFS is 0.21, indicating a strong growth potential when compared to KRYAY's PEG ratio of 1.98, which suggests that BRFS is more favorably positioned for growth relative to its valuation [5]. - BRFS has a P/B ratio of 1.24, while KRYAY's P/B ratio is 2.53, further supporting the notion that BRFS is undervalued compared to its book value [6]. Earnings Outlook - BRFS is experiencing an improving earnings outlook, which is a key factor in its higher Zacks Rank of 2 (Buy) compared to KRYAY's Zacks Rank of 4 (Sell) [3][7].

Core Viewpoint - The article discusses the reliability of brokerage recommendations and their influence on stock prices, specifically focusing on BRF (BRFS) and the importance of using these recommendations in conjunction with other analytical tools like the Zacks Rank [1][4]. Brokerage Recommendations - BRF has an average brokerage recommendation (ABR) of 1.80, indicating a position between Strong Buy and Buy, based on recommendations from five brokerage firms [2]. - Out of the five recommendations, three are classified as Strong Buy, accounting for 60% of the total recommendations [2]. Limitations of Brokerage Recommendations - Solely relying on brokerage recommendations for investment decisions may not be advisable, as studies indicate they often fail to guide investors effectively towards stocks with high price appreciation potential [4]. - Analysts from brokerage firms tend to exhibit a strong positive bias in their ratings due to vested interests, leading to a disproportionate number of Strong Buy recommendations compared to Strong Sell recommendations [5][9]. Zacks Rank as an Alternative - The Zacks Rank, a proprietary stock rating tool, categorizes stocks into five groups based on earnings estimate revisions, providing a more reliable indicator of near-term stock price performance [7][10]. - The Zacks Rank is updated more frequently than the ABR, reflecting timely changes in earnings estimates and business trends [11]. Current Earnings Estimates for BRF - The Zacks Consensus Estimate for BRF's current year earnings has increased by 4.9% over the past month, now standing at $0.46, indicating growing optimism among analysts regarding the company's earnings prospects [12]. - The recent changes in consensus estimates, along with other factors, have resulted in a Zacks Rank of 2 (Buy) for BRF, suggesting a positive outlook for the stock [13].