XP Investimentos projects a strong third quarter for Minerva Foods, supported by robust volumes in both domestic and export markets, higher export prices—especially to China—and the consolidation of recently acquired assets. Following the report, Minerva’s shares rose 3.2% on Thursday, October 23.
Analysts highlighted that the company will begin a debt-reduction process, driven by improved results and the release of working capital, particularly from the sale of 60% of its accumulated stock in the United States. XP estimates free cash flow generation of R$ 600 million for the quarter, described by analyst Leonardo Alencar as the “main highlight” of the period.
The brokerage maintains a buy recommendation for the stock, with a target price of R$ 7.90, implying an upside potential of 11.7%. Improved cash conversion should be well received by investors, consolidating Minerva as XP’s “top pick” within the meat sector.
XP also estimates that the company closed the operational gap between its new and legacy assets, with a positive impact on volumes. The new assets in Brazil are believed to have reached 141 thousand tons in the quarter, with prices equivalent to 90% of legacy assets, compared to 80% estimated in the second quarter.
Source: Money Times
