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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 16.35 (2.06% today). The market cap for BRF S.A. is 13360.08, and is in the sector Consumer Goods, and Meat Products industry. The target price for BRF S.A. is 54.04. Currently BRF S.A. is trading with a P/E of 20.62, and a forward P/E of 17.97. Average volume for BRF S.A. is 1739.89 and so far today it is 1347600.

Performance in the last year for BRF S.A. has been -3.40%. For EPS growth, BRF S.A. has seen a growth of 41.80%, and is looking to grow in the next year to 62.21%. More long term stats show that EPS growth has been 30.50% over the last five years and could be 1.55% for the next five years. BRF S.A. has seen sales growth quarter over quarter at 7.60%, with EPS growth quarter over quarter at -91.10%. The 20-day simple moving average is 0.32%, with the 200-day simple moving average coming to 16.02%.

Since the IPO date for BRF S.A. on the 10/9/2003, BRF S.A. has seen performance year to date to be 20.10%. With BRF S.A. trading at 16.35, the dividend yield is 1.96%, and the EPS is 0.79.

So could BRF S.A., be undervalued? Well as said before P/E is 20.62. The PEG is 13.34, P/S is 1.3 and the P/B is at 3.46. The P/cash is 8.32, with P/free cash flow at *TBA.

BRF S.A. ability to deal with debt shows that the current ratio is 1.4, and the quick ratio is 0.9. This is with long term debt/equity at 1.05, and total debt/equity at 1.35.

In terms of margins, BRF S.A. has a gross margin of 27.60%, an operating margin of 11.00% and a profit margin of 7.00%.Payout ratio for BRF S.A. is 69.10%. Return on assets come to 5.80% 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 817.13. While shares float is 784.75. The float short is currently 1.25%, and short ratio is 5.66.

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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Stephen Butters

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