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Is this Large Market Cap Stock target price reasonable for BRF S.A. (NYSE:BRFS)?

The company in question is, BRF S.A. (NYSE:BRFS) currently with a stock price of 15.75 (2.21% today). The market cap for BRF S.A. is 12696.3, and is in the sector Consumer Goods, and Meat Products industry. The target price for BRF S.A. is 51.89. Currently BRF S.A. is trading with a P/E of 16.64, and a forward P/E of 18.3. Average volume for BRF S.A. is 1873.6 and so far today it is 464019.

Performance in the last year for BRF S.A. has been -25.14%. For EPS growth, BRF S.A. has seen a growth of 41.80%, and is looking to grow in the next year to 59.17%. More long term stats show that EPS growth has been 30.50% over the last five years and could be 1.85% for the next five years. BRF S.A. has seen sales growth quarter over quarter at 15.20%, with EPS growth quarter over quarter at -91.00%. The 20-day simple moving average is 15.39%, with the 200-day simple moving average coming to 13.33%.

Since the IPO date for BRF S.A. on the 10/9/2003, BRF S.A. has seen performance year to date to be 13.20%. With BRF S.A. trading at 15.75, the dividend yield is 2.08%, and the EPS is 0.93.

So could BRF S.A., be undervalued? Well as said before P/E is 16.64. The PEG is 9.01, P/S is 1.24 and the P/B is at 3. The P/cash is 6.36, with P/free cash flow at *TBA.

BRF S.A. ability to deal with debt shows that the current ratio is 1.6, and the quick ratio is 1.1. This is with long term debt/equity at 1.02, and total debt/equity at 1.28.

In terms of margins, BRF S.A. has a gross margin of 29.90%, an operating margin of 12.80% and a profit margin of 8.10%.Payout ratio for BRF S.A. is 41.00%. Return on assets come to 6.80% with return on investment coming to 16.10%.

Insider ownership for BRF S.A., is at 1.70% and institutional ownership comes to 12.40%. Outstanding shares are at 823.9. While shares float is 720.4. The float short is currently 0.23%, and short ratio is 0.87.

Disclaimer: Remember there is a risk to your investment, this is not a recommendation, nor personal advice, never invest more than you are able too loose.

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Peter Clarke

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