March 28, 2024
Top 10 Stock BRF Hold Recommendation
How to read the ranks
For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".
Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".
Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.
Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.
(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).
(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.
Snapshot: BRF – Top 10 Stock in Renewable Energy Use Leaders
BRF is listed as a top 10 stock on March 28, 2024 in the market index Renewables Users because of its high performance in at least one of the Obermatt investment strategies. Only one consolidated Obermatt Rank is above-average. The company is growing above average, but all other facts speak against a stock purchase, especially the low market sentiment by professional investors. Based on the Obermatt 360° View of 35 (35% performer), Obermatt assesses an overall hold recommendation for BRF on March 28, 2024.
Snapshot: Obermatt Ranks
| Country | Brazil |
| Industry | Packaged Foods & Meats |
| Index | BOVESPA, Human Rights, Low Waste, Renewables Users, Recycling, Water Efficiency |
| Size class | X-Large |
When Obermatt identifies the Top 10 stocks in a market, it’s based on a certain investment strategy. The best performing stocks usually aren’t the ones that everyone is talking about (those are often "over-priced" and have low Value ranks).
For each investment strategy, we provide you with more detailed analysis and our recommendation. You see the ranks of the top 10 stocks ranked by that particular investment strategy (360° View, Sentiment, Value, Growth, Safety and Combined Financial Performance).
360° View: Obermatt 360° View BRF Hold
| 360 METRICS | March 28, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 34 |
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| GROWTH | ||||||||
| GROWTH | 99 |
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| SAFETY | ||||||||
| SAFETY | 14 |
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| SENTIMENT | ||||||||
| SENTIMENT | 22 |
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| 360° VIEW | ||||||||
| 360° VIEW | 35 |
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ANALYSIS: With an Obermatt 360° View of 35 (better than 35% compared with alternatives), overall professional sentiment and financial characteristics for the stock BRF are below the industry average. The 360° View is based on consolidating four consolidated indicators, with three out of four indicators below average for BRF. The consolidated Growth Rank has a good rank of 99, which means that the company experiences above-average growth momentum when looking at financial metrics such as revenue, profit, and invested capital growth, as well as stock returns. It ranks higher than 99% of competitors in the same industry. The other indicators are below average, namely the Value, Safety, and Sentiment Ranks.The Value Rank at 34 means that the share price of BRF is on the high side compared with its peers regarding revenues, profits, and invested capital. The stock price is higher than for 66% of alternative stocks in the same industry. The consolidated Safety Rank has a riskier rank of 14, which means that the company has a riskier financing structure than 86% comparable companies when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. The consolidated Sentiment Rank also has a low rank of 22, indicating professional investors are more pessimistic about the stock than for 78% of alternative investment opportunities. ...read more
RECOMMENDATION: With a consolidated 360° View of 35, BRF is worse than 65% of all alternative stock investment opportunities based on the Obermatt Method. As only one of the consolidated Obermatt Ranks exhibits excellent performance, namely the above-average growth (Growth Rank of 99), it is a riskier stock investment proposition. Aside from the critical professional market sentiment (Sentiment Rank of 22), the company is rather risky when it comes to financing (Safety Rank of 14). The negative market view on BRF may be due to the high stock price (low value). A growth company like this may get too expensive at one point in time. If too many investors are desperate to join the party, they may drive stock prices above reasonable levels. While it is typical for growth companies to have low value, because investors are willing to pay more for companies that are expected to have high growth, the crucial question is: how much more do you pay for the stock of BRF compared with alternatives? You can use the following rule of thumb: The value rank shouldn’t be lower than one minus the growth rank. For example, if the growth rank is at 75, and the value rank is at 5, you should tread carefully. If the value rank is at 40, it still might be a good value (even though it is lower than 50). As market sentiment is critical, you should be careful with paying more than market-average for this stock and conduct further research into the company's future growth potential. ...read more
Sentiment Strategy: Professional Market Sentiment for BRF negative
ANALYSIS: With an Obermatt Sentiment Rank of 22 (better than 22% compared with alternatives), overall professional sentiment and engagement for the stock BRF is critical, mostly below average. The Sentiment Rank is based on consolidating four sentiment indicators, with three out of four metrics below average for BRF. Analyst Opinions are at a rank of 9 (worse than 91% of alternative investments), which means that currently, stock research analysts tend to warn against investing in the stock of the company. But they are changing their opinions! Analyst Opinions Change has a rank of 78, which means that stock research experts have found something to make them more positive about investing in the company. In other words, they are getting more optimistic of stock investments in BRF. But the Professional Investors rank is low at 38, which means that professional investors hold less stock in this company than in 62% of alternative investment opportunities. Pros tend to invest in other companies. Market Pulse is also low at a rank of 23, which means that the current professional news and professional social networks tend to be negative when discussing this company (more negative news than for 77% of competitors). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 22 (less encouraging than 78% compared with investment alternatives), BRF has a reputation among professional investors that is far below that of its competitors. These are quite a few negative sentiment signals. One may want to trust the analysts that are changing their opinions. They may be early indications of better times, especially if the company is a smaller one. But If they are an extra large company, they should have more professional stockholders than are currently present. ...read more
Value Strategy: BRF Stock Price Value below-average critical
ANALYSIS: With an Obermatt Value Rank of 34 (worse than 66% compared with alternatives), BRF shares are more expensive than the average comparable stock. The Value Rank is based on consolidating four value indicators, where half the indicators are below and half above average for BRF. Price-to-Sales (P/S) is 75, which means that the stock price compared with what market professionals expect for future sales is lower than for 75% of comparable companies, indicating a good value concerning BRF's revenue size. The same is valid for the Price-to-Book Capital ratio (also referred to as market-to-book ratio), which is more favorable than for 66% of alternatives (34% of peers have a higher ratio). But expected dividend yields with a Dividend Yield rank of 6 are lower than average (dividends are expected to be lower than 94% of other stocks) while the Price to Profit ratio (or Price to Earnings (P/E) ratio) is higher than average with a Price-to-Profit Rank of 17, making the stock more expensive compared with the company's expected profit levels. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 34, is a hold recommendation based on BRF's stock price compared with the company's operational size and dividend yields. Low profits and low dividends as seen here for BRF may indicate a restructuring phase. This could be transitory, making the company a good value when profits recover and dividends return to higher levels. If the stock price is compared with the size indicators for revenue and invested capital, it is on the lower side, making this stock a good value investment (apart from current profit and dividend expectations). ...read more
Growth Strategy: BRF Growth Momentum high
ANALYSIS: With an Obermatt Growth Rank of 99 (better than 99% compared with alternatives) for 2024, BRF shows one of the highest growth dynamics in its industry. Investors also speak of high momentum. The Growth Rank is based on consolidating four value indicators, with all four indicators above average for BRF. Sales Growth has a value of 50, which means that, currently, professionals expect the company to grow more than 50% of its competitors. The same is valid for Profit Growth with a value of 86 and for Capital Growth with 92. In addition, Stock Returns had an above-average rank value of 98, which means they have been higher than 98% of comparable investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 99, is a buy recommendation for growth and momentum investors. Since all Growth Ranks are positive, BRF exhibits above-average growth momentum. This could be due to a uniquely strong market position, proprietary technology, or an extensive corporate acquisition strategy. Growth investors will find this an attractive investment opportunity, unless they expect that the current phase is transitory and will deteriorate in the future. The current performance could also be a temporary recovery from a very low point, such as a turn-around situation. In the case of a turn-around, the current performance may or may not be followed by a continuing positive development. ...read more
Safety Strategy: BRF Debt Financing Safety risky
| SAFETY METRICS | March 28, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 17 |
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| REFINANCING | ||||||||
| REFINANCING | 70 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 8 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 14 |
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ANALYSIS: With an Obermatt Safety Rank of 14 (better than 14% compared with alternatives), the company BRF has much riskier financing practices than comparable other companies, which means that their overall debt burden is significantly above the industry average. This doesn't mean that the business of BRF is also risky, it only means that the company is on the riskier side in respect to bankruptcy in case things turn sour, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with just one indicator above average for BRF and the other two below average. Refinancing is at 70, meaning the portion of the debt about to be refinanced is below average. It has less debt in the refinancing stage than 70% of its competitors. But Leverage is high with a rank of 17, meaning the company has an above-average debt-to-equity ratio. It has more debt than 83% of its competitors. Liquidity is also on the riskier side with a rank of 8, meaning the company generates less profit to service its debt than 92% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 14 (worse than 86% compared with alternatives), BRF has a financing structure that is significantly riskier than that of its competitors. A good Refinancing Rank means that the problems of the company may not be around the corner. But high Leverage is only good if things go well, and low Liquidity is a signal for caution. The financing signals for BRF are on the riskier side, requiring the company's future to be on the safer side. Investors may want to look at Growth and Sentiment ranks before making an investment decision. ...read more
Combined financial peformance: BRF Below-Average Financial Performance
| COMBINED PERFORMANCE | March 28, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 34 |
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| GROWTH | ||||||||
| GROWTH | 99 |
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| SAFETY | ||||||||
| SAFETY | 8 |
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| COMBINED | ||||||||
| COMBINED | 44 |
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ANALYSIS: With an Obermatt Combined Rank of 44 (worse than 56% compared with investment alternatives), BRF (Packaged Foods & Meats, Brazil) shares have somewhat below-average financial characteristics compared with similar stocks. Shares of BRF are low in value (priced high) with a consolidated Value Rank of 34 (worse than 66% of alternatives), and are riskily financed (Safety Rank of 14, which means above-average debt burdens) but show above-average growth (Growth Rank of 99). ...read more
RECOMMENDATION: A Combined Rank of 44, is a hold recommendation based on BRF's financial characteristics. As the company BRF shows low value with an Obermatt Value Rank of 34 (66% of comparable investments are less expensive), investors should look at the other ranks. In this case, growth is expected to be above-average, better than 99% of comparable companies (Obermatt Growth Rank is 99). This is a typical case. Companies with above average growth tend to cost more than stocks with slower growth expectations. If this is a high-growth company, the low Obermatt Safety Rank of 14 is a good sign. The more debt a well-performing company has, the higher the returns to shareholders. However, if growth turns negative or interest rates increase, high debt may become a burden. If you believe the future is bright for BRF, even a low-value company (in terms of its key financial indicators) can be a good investment. ...read more
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