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JBS Proposal to Acquire Stake in Pilgrim's Pride Seen as Slightly Positive, UBS says

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JBS' (JBS) proposal to acquire an 18% stake in Pilgrim's Pride (PPC) it does not already own is seen as slightly positive for the company given the potential to optimize its corporate structure, UBS Securities said in a note emailed Wednesday.

According to the note, the acquisition comes at a challenging point in the US poultry cycle, which has pressured Pilgrim's Pride's stock performance, with shares at a two-year low. While there is a path for margin recovery from current levels, the brokerage expects this to be gradual and thus sees near-term stock pressure, the note said.

However, UBS sees room for JBS to continue to re-rate given its US listing.

UBS kept a buy rating on JBS with a price target of $17.

Shares of JBS rose more than 2% in Wednesday trading.

Price: $14.04, Change: $+0.38, Percent Change: +2.75%

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