The closure of two JBS plants in the United States announced last week reflects the country’s historically tight cattle supply rather than a structural deterioration of the business, according to a BTG Pactual report following the company’s Investor Day. The bank maintained its buy recommendation on JBS shares and a target price of R$ 100 per share, implying upside potential of nearly 59%.
BTG highlighted that the US beef industry is experiencing a sharp contraction phase in the cattle cycle. Since 2019, the US beef cow herd has declined 13% to 27.9 million head, while the total cattle inventory has fallen to its lowest level since 1952, according to USDA data. Against this backdrop, JBS announced the closure of two facilities, reducing its annual US slaughter capacity from 33 million to 27 million head.
BTG believes the company can improve margins through the closure of less efficient operations, greater asset integration and productivity gains. The bank also noted that a potential reopening of cattle imports from Mexico could partially ease the supply shortage, although the situation remains affected by the spread of New World screwworm in the region.
Beyond its US beef operations, analysts emphasized that JBS’s key strength remains its geographic and product diversification. With long-term debt, an average financing cost of 5.7% per year and a US$ 400 million reduction in its 2026 capital expenditure plan, BTG believes the company is well positioned to navigate an adverse cattle cycle while continuing to strengthen its profile as a global food and branded-products company.
Source: Exame
