December 18, 2012 / 10:31 AM / in 5 years

STXNEWS LATAM-BTG Pactual raises target for Brazil's JBS on debt reduction

Analysts at BTG Pactual Group led by Thiago Duarte upped on Tuesday the price target for shares of JBS SA, the world’s largest meatpacker, as management is effectively reducing the Brazilian company’s debt levels. Duarte and his team expect the shares to rise to 8.4 reais by the end of next year, and kept a “buy” recommendation on them.

JBS is gaining momentum thanks to a better outlook for its Mercosur division, and despite the challenging prospects facing meatpackers in the United States amid higher raw materials, BTG Pactual added. As a result, the analysts cut their 2012 earnings estimates by 17 percent but increased their earnings before interest, tax, depreciation and amortization estimates 13 percent and 26 percent for 2012 and 2013, respectively “to account for JBS’s continuing expansion - we see revenues jumping 17% year-on-year and a weaker real,” Duarte wrote in a note.

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