MBRF Cutting Ests Despite 1Q Beat. Reiterate OW on Expected Earnings Improvement and Valuations

Research evidence excerpt

MBRF Cutting Ests Despite 1Q Beat. Reiterate OW on Expected Earnings Improvement and Valuations

J P M O R G A N Latin America Equity Research

20 May 2026

MBRF Overweight

MBRF3.SA, MBRF3 BZ

Cutting Ests Despite 1Q Beat. Reiterate OW on Price (19 May 26):R$16.50

Expected Earnings Improvement and Valuations ▼Price Target (Dec-26):R$21.50 Prior (Dec-26):R$24.50

We are reiterating our OW rating on MBRF but cutting estimates and price target

despite an earnings beat in 1Q. We lower our 2026E EBITDA by 2% to R$13.2bn LatAm Food & Beverages and

Agribusiness(3% above consensus) and 2027 by 7% to R$13.1bn as (1) we lower our BRL

forecasts by 4% and 9% for this year and next. (2) We push basically a year forward Lucas Ferreira AC

the recovery of the US beef cycle, now forecasting EBITDA margins for National (55-11) 4950-3629

lucas.x.ferreira@jpmorgan.com

Beef of 1.1% this year, 2.5% next year, and 5.5% in 2028. We think the still modest Banco J.P. Morgan S.A.

heifer retention rates, dry pastures, and eventually more competition with imported

Larissa Perez

beef will lead sector margins to be depressed for an extended period of time. Our (55-11) 4950-6400

estimates for BRF and South America beef are roughly unchanged, apart from FX. larissa.perez@jpmchase.com

For these businesses, we expect to see more stability at reasonably strong levels, Banco J.P. Morgan S.A.

while volumes are set to improve as a result of the maturation of previous Froylan Mendez

investments. As a result, we expect earnings momentum for MBRF to remain (52-55) 5540-9482

reasonably good, despite industry challenges. We now model FCFE to be negative froylan.mendez@jpmchase.com

R$180m in the year as we view 2026 as a trough year for earnings and FCF. The J.P.MorganMorganGrupoCasaFinancierode Bolsa, S.A.