UPDATE: Miller Tabak Downgrades BRF Brasil Foods to Hold, Lowers PT
In a report published Friday, Miller Tabak + Co. downgraded its rating on BRF Brasil Foods SA (NYSE: BRFS) from Buy to Hold, and slightly lowered its price target from $18.00 to $17.00.
Miller Tabak noted, “Despite a tough operating environment (soaring soymeal costs) and the near-term EPS impact related to Brasil Foods' asset swap with Marfrig, shares have risen by ~15% since the company reported Q2:12 earnings in mid-August. In our view, the company's announcement that it intends to raise packaged food prices by 5-10% in time for the holiday season combined with a roughly 7-10% production cut by most Brazilian poultry producers in July was the impetus for the strong performance in shares of Brasil Foods during the past two months. Furthermore, we believe stimulus measures (reducing energy costs for residential/industrial buyers) announced by the Brazilian government in early September has also attracted macro-driven investors back into key LATM names.”
BRF Brasil Foods SA closed on Thursday at $17.30.
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Tags: Miller Tabak + Co.