September 26, 2024
Top 10 Stock BRF Buy 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 Recycling Leaders
BRF is listed as a top 10 stock on September 26, 2024 in the market index Recycling 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 50 (high 50% performer), Obermatt assesses an overall buy recommendation for BRF on September 26, 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 Buy
| 360 METRICS | September 26, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 47 |
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| GROWTH | ||||||||
| GROWTH | 100 |
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| SAFETY | ||||||||
| SAFETY | 16 |
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| SENTIMENT | ||||||||
| SENTIMENT | 37 |
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| 360° VIEW | ||||||||
| 360° VIEW | 50 |
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ANALYSIS: With an Obermatt 360° View of 50 (better than 50% compared with alternatives), overall professional sentiment and financial characteristics for the stock BRF are above 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 100, 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 100% of competitors in the same industry. The other indicators are below average, namely the Value, Safety, and Sentiment Ranks.The Value Rank at 47 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 53% of alternative stocks in the same industry. The consolidated Safety Rank has a riskier rank of 16, which means that the company has a riskier financing structure than 84% 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 37, indicating professional investors are more pessimistic about the stock than for 63% of alternative investment opportunities. ...read more
RECOMMENDATION: With a consolidated 360° View of 50, BRF is better positioned than 50% 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 100), it is a riskier stock investment proposition. Aside from the critical professional market sentiment (Sentiment Rank of 37), the company is rather risky when it comes to financing (Safety Rank of 16). 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 only reserved
ANALYSIS: With an Obermatt Sentiment Rank of 37 (better than 37% compared with alternatives), overall professional sentiment and engagement for the stock BRF is below industry 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 13 (worse than 87% 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 85, 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 26, which means that professional investors hold less stock in this company than in 74% of alternative investment opportunities. Pros tend to invest in other companies. Market Pulse is also low at a rank of 49, which means that the current professional news and professional social networks tend to be negative when discussing this company (more negative news than for 51% of competitors). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 37 (less encouraging than 63% compared with investment alternatives), BRF has a reputation among professional investors that is 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 47 (worse than 53% compared with alternatives), BRF shares are more expensive than the average comparable stock. The Value Rank is based on consolidating four value indicators, with three out of four indicators above average for BRF. Price-to-Sales (P/S) is 69, which means that the stock price compared with what market professionals expect for future sales is lower than for 69% of comparable companies, indicating a good value regarding BRF's revenue size. The same is valid for expected Price to Profits (or Price / Earnings, P/E), more favorable than for 58% of alternatives, and it's also true for the Price-to-Book Capital ratio (also referred to as market-to-book ratio) with a Price-to-Capital Rank of 55. But, compared with other companies in the same industry, dividend yields are expected to be lower than average; only 25% of all competitors have even lower dividend yields than BRF (a Dividend Yield Rank of 25). 75% alternative investments in the same business provide a higher dividend yield. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 47, is a hold recommendation based on BRF's stock price compared with the company's operational size and dividend yields. The below-average dividend yield may be a good sign, as it could mean the company has more attractive investment opportunities for the generated cash than to pay it out as dividends. A low dividend yield can also indicate a growth phase. ...read more
Growth Strategy: BRF Growth Momentum high
| GROWTH METRICS | September 26, 2024 | |||||||
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| REVENUE GROWTH | ||||||||
| REVENUE GROWTH | 24 |
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| PROFIT GROWTH | ||||||||
| PROFIT GROWTH | 96 |
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| CAPITAL GROWTH | ||||||||
| CAPITAL GROWTH | 98 |
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| STOCK RETURNS | ||||||||
| STOCK RETURNS | 100 |
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| CONSOLIDATED RANK: GROWTH | ||||||||
| CONSOLIDATED RANK: GROWTH | 100 |
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ANALYSIS: With an Obermatt Growth Rank of 100 (better than 100% 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 but one indicator above average for BRF. Profit Growth has a rank of 96 which means that currently professionals expect the company to grow its profits more than 96% of its competitors. The same is valid for capital growth and stock returns. Capital Growth has a rank of 98, and Stock Returns has a rank of 100 which means that the stock returns have recently been above 100% of alternative investments. Only revenue growth is low with a Sales Growth has a rank of 24 (76% of its competitors are better). ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 100, is a buy recommendation for growth and momentum investors. The many positive growth indicators indicate a positive growth momentum with only low revenue growth. That can also be attributed to divestments or the sale of unprofitable businesses. If that is the reason, overall growth is well on track to making this stock attractive for growth investors. ...read more
Safety Strategy: BRF Debt Financing Safety risky
| SAFETY METRICS | September 26, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 16 |
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| REFINANCING | ||||||||
| REFINANCING | 65 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 10 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 16 |
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ANALYSIS: With an Obermatt Safety Rank of 16 (better than 16% 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 65, meaning the portion of the debt about to be refinanced is below average. It has less debt in the refinancing stage than 65% of its competitors. But Leverage is high with a rank of 16, meaning the company has an above-average debt-to-equity ratio. It has more debt than 84% of its competitors. Liquidity is also on the riskier side with a rank of 10, meaning the company generates less profit to service its debt than 90% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 16 (worse than 84% 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 Above-Average Financial Performance
| COMBINED PERFORMANCE | September 26, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 47 |
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| GROWTH | ||||||||
| GROWTH | 100 |
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| SAFETY | ||||||||
| SAFETY | 10 |
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| COMBINED | ||||||||
| COMBINED | 64 |
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ANALYSIS: With an Obermatt Combined Rank of 64 (better than 64% compared with investment alternatives), BRF (Packaged Foods & Meats, Brazil) shares have above-average financial characteristics compared with similar stocks. Shares of BRF are low in value (priced high) with a consolidated Value Rank of 47 (worse than 53% of alternatives), and are riskily financed (Safety Rank of 16, which means above-average debt burdens) but show above-average growth (Growth Rank of 100). ...read more
RECOMMENDATION: A Combined Rank of 64, is a buy recommendation based on BRF's financial characteristics. As the company BRF shows low value with an Obermatt Value Rank of 47 (53% 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 100% of comparable companies (Obermatt Growth Rank is 100). 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 16 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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