XP sets neutral rating and R$ 20.90 target price for MBRF

XP Investimentos initiated coverage on MBRF—the company created from the merger between Marfrig and BRF, which debuted on the B3 exchange on September 23. Analysts Leonardo Alencar, Pedro Fonseca, and Samuel Isaak issued a neutral recommendation with a target price of R$ 20.90, implying 10% upside potential.

The report highlights geographic and protein diversification as key strengths, along with long-term value creation potential. However, XP cautioned about pressured beef margins in the U.S. due to the current cattle cycle and the expected normalization of poultry margins in Brazil—factors that could limit short-term earnings momentum.

According to XP, the stock trades at a 5.9x EV/EBITDA 2026 multiple, with a modest free cash flow yield. “The valuation appears demanding in the short term, so the stock is likely to move sideways for now,” the report said.

XP projects that MBRF will reach R$ 163.8 billion in net revenue and R$ 12.8 billion in EBITDA by 2026. However, it expects the BRF division to contribute, on average, 80% of consolidated EBITDA over the next two years, making the recovery of poultry margins a key driver for earnings and valuation revisions.