JBS (BOVESPA:JBSS3) - Share price, News & Analysis

Q: What is the Fair Price of JBSS3 when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

JBSS3 (R$33) is trading below our estimate of [[fair value]] (R$80.85)

JBSS3 fundamental analysis
Snowflake Score
Valuation	5/6
Future Growth	1/6
Past Performance	5/6
Financial Health	4/6
Dividends	3/6

JBSS3 Stock Overview

JBS S.A., a food company, processes and trades in animal protein worldwide.

Rewards

Trading at 59.2% below our estimate of its fair value

Earnings grew by 87.5% over the past year

Risk Analysis

Earnings are forecast to decline by an average of 14.8% per year for the next 3 years

Has a high level of debt

Unstable dividend track record

JBS Competitors

São Martinho

BOVESPA:SMTO3

R$14.1b

Marfrig Global Foods

BOVESPA:MRFG3

R$8.6b

Minerva

BOVESPA:BEEF3

R$8.2b

M. Dias Branco Indústria e Comércio de Alimentos

BOVESPA:MDIA3

R$9.0b

Price History & Performance

Summary of all time highs, changes and price drops for JBS
Historical stock prices
Current Share Price	R$33.00
52 Week High	R$39.81
52 Week Low	R$28.12
Beta	0.38
1 Month Change	-6.09%
3 Month Change	-9.32%
1 Year Change	14.19%
3 Year Change	47.39%
5 Year Change	390.34%
Change since IPO	371.43%

Shareholder Returns

	JBSS3	BR Food	BR Market
7D	0.9%	1.1%	0.7%
1Y	14.2%	-7.6%	-28.8%

Return vs Industry: JBSS3 exceeded the BR Food industry which returned -7.5% over the past year.

Return vs Market: JBSS3 exceeded the BR Market which returned -29.7% over the past year.

Price Volatility

Is JBSS3's price volatile compared to industry and market?
JBSS3 volatility
JBSS3 Average Weekly Movement	3.5%
Food Industry Average Movement	5.6%
Market Average Movement	5.9%
10% most volatile stocks in BR Market	9.2%
10% least volatile stocks in BR Market	2.8%

Stable Share Price: JBSS3 is less volatile than 75% of BR stocks over the past 3 months, typically moving +/- 3% a week.

Volatility Over Time: JBSS3's weekly volatility (3%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
1953	250,000	Gilberto Tomazoni	https://www.jbs.com.br

JBS S.A., a food company, processes and trades in animal protein worldwide. It offers beef, pork, chicken, and lamb products and by-products; food products; pet food and concentrates; and bresaola. The company also produces and commercializes steel cans, plastic resins, soap bases and bars, biodiesel, glycerin, fatty acid, collagen, and wrapper, as well as wet blue, semi-finished, and finished leather products; manages industrial residue; purchases and sells soybeans; and produces, cogenerates, and commercializes electric power.

JBS Fundamentals Summary

How do JBS's earnings and revenue compare to its market cap?
JBSS3 fundamental statistics
Market Cap	R$73.20b
Earnings (TTM)	R$23.58b
Revenue (TTM)	R$366.31b

3.1x

P/E Ratio

0.2x

P/S Ratio

Is JBSS3 overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
JBSS3 income statement (TTM)
Revenue	R$366.31b
Cost of Revenue	R$294.87b
Gross Profit	R$71.44b
Other Expenses	R$47.86b
Earnings	R$23.58b

Last Reported Earnings

Mar 31, 2022

Next Earnings Date

Aug 11, 2022

Earnings per share (EPS)	10.63
Gross Margin	19.50%
Net Profit Margin	6.44%
Debt/Equity Ratio	185.8%

How did JBSS3 perform over the long term?

See historical performance and comparison

Dividends

6.1%

Current Dividend Yield

20%

Payout Ratio

We’ve recently updated our valuation analysis.

Valuation

Is JBSS3 undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

5/6

Valuation Score 5/6

Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
PEG Ratio

Key Valuation Metric

Which metric is best to use when looking at relative valuation for JBSS3?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for JBSS3. This is calculated by dividing JBSS3's market cap by their current preferred multiple.
What is JBSS3's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	R$73.20b

JBSS3 key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue	0.4x
Enterprise Value/EBITDA	3.3x
PEG Ratio	-0.2x

Price to Earnings Ratio vs Peers

How does JBSS3's PE Ratio compare to its peers?

JBSS3 PE Ratio vs Peers

The above table shows the PE ratio for JBSS3 vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	11.7x
SMTO3 São Martinho	9.5x	5.5%	R$14.1b
MRFG3 Marfrig Global Foods	2.1x	-21.6%	R$8.6b
BEEF3 Minerva	18.1x	26.8%	R$8.2b
MDIA3 M. Dias Branco Indústria e Comércio de Alimentos	17.1x	18.8%	R$9.0b
JBSS3 JBS	3.1x	-14.8%	R$73.2b

Forward PE

Price-To-Earnings vs Peers: JBSS3 is good value based on its Price-To-Earnings Ratio (3.1x) compared to the peer average (11.7x).

Price to Earnings Ratio vs Industry

How does JBSS3's PE Ratio compare vs other companies in the South American Food Industry?

Price-To-Earnings vs Industry: JBSS3 is good value based on its Price-To-Earnings Ratio (3.1x) compared to the BR Food industry average (8.3x)

Price to Earnings Ratio vs Fair Ratio

What is JBSS3's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

JBSS3 PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	3.1x
Fair PE Ratio	9.1x

Price-To-Earnings vs Fair Ratio: JBSS3 is good value based on its Price-To-Earnings Ratio (3.1x) compared to the estimated Fair Price-To-Earnings Ratio (9.1x).

Share Price vs Fair Value

What is the Fair Price of JBSS3 when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: JBSS3 (R$33) is trading below our estimate of fair value (R$80.85)

Significantly Below Fair Value: JBSS3 is trading below fair value by more than 20%.

Price to Earnings Growth Ratio

PEG Ratio: JBSS3's earnings are forecast to decline next year, so we can't calculate its PEG ratio.

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Future Growth

How is JBS forecast to perform in the next 1 to 3 years based on estimates from 11 analysts?

Future Growth Score

1/6

Future Growth Score 1/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

-14.8%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: JBSS3's earnings are forecast to decline over the next 3 years (-14.8% per year).

Earnings vs Market: JBSS3's earnings are forecast to decline over the next 3 years (-14.8% per year).

High Growth Earnings: JBSS3's earnings are forecast to decline over the next 3 years.

Revenue vs Market: JBSS3's revenue (2.9% per year) is forecast to grow slower than the BR market (5.7% per year).

High Growth Revenue: JBSS3's revenue (2.9% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: JBSS3's Return on Equity is forecast to be high in 3 years time (22%)

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Past Performance

How has JBS performed over the past 5 years?

Past Performance Score

5/6

Past Performance Score 5/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

63.0%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: JBSS3 has high quality earnings.

Growing Profit Margin: JBSS3's current net profit margins (6.4%) are higher than last year (4.4%).

Past Earnings Growth Analysis

Earnings Trend: JBSS3's earnings have grown significantly by 63% per year over the past 5 years.

Accelerating Growth: JBSS3's earnings growth over the past year (87.5%) exceeds its 5-year average (63% per year).

Earnings vs Industry: JBSS3 earnings growth over the past year (87.5%) exceeded the Food industry 54%.

Return on Equity

High ROE: Whilst JBSS3's Return on Equity (51.24%) is outstanding, this metric is skewed due to their high level of debt.

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Financial Health

How is JBS's financial position?

Financial Health Score

4/6

Financial Health Score 4/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: JBSS3's short term assets (R$75.0B) exceed its short term liabilities (R$53.1B).

Long Term Liabilities: JBSS3's short term assets (R$75.0B) do not cover its long term liabilities (R$89.6B).

Debt to Equity History and Analysis

Debt Level: JBSS3's net debt to equity ratio (148.6%) is considered high.

Reducing Debt: JBSS3's debt to equity ratio has reduced from 230.2% to 185.8% over the past 5 years.

Debt Coverage: JBSS3's debt is well covered by operating cash flow (26.2%).

Interest Coverage: JBSS3's interest payments on its debt are well covered by EBIT (8.1x coverage).

Balance Sheet

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Dividend

What is JBS current dividend yield, its reliability and sustainability?

Dividend Score

3/6

Dividend Score 3/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Future Dividend Coverage

6.06%

Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: JBSS3's dividend (6.06%) is higher than the bottom 25% of dividend payers in the BR market (1.72%).

High Dividend: JBSS3's dividend (6.06%) is low compared to the top 25% of dividend payers in the BR market (7.73%).

Stability and Growth of Payments

Stable Dividend: JBSS3 has been paying a dividend for less than 10 years and during this time payments have been volatile.

Growing Dividend: JBSS3's dividend payments have increased, but the company has only paid a dividend for 8 years.

Earnings Payout to Shareholders

Earnings Coverage: With its low payout ratio (20.5%), JBSS3's dividend payments are well covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: With its reasonably low cash payout ratio (35.4%), JBSS3's dividend payments are well covered by cash flows.

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Management

How experienced are the management team and are they aligned to shareholders interests?

7.5yrs

Average management tenure

CEO

Gilberto Tomazoni (62 yo)

3.5yrs

Tenure

Mr. Gilberto Tomazoni has been the Global President and Chief Executive Officer at JBS Foods S.A. at JBS S.A. since 2013. Mr. Tomazoni has been the Chief Executive Officer at JBS Foods International B.V.,...

Leadership Team

Experienced Management: JBSS3's management team is seasoned and experienced (7.5 years average tenure).

Board Members

Experienced Board: JBSS3's board of directors are not considered experienced ( 1.2 years average tenure), which suggests a new board.

Ownership

Who are the major shareholders and have insiders been buying or selling?

Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.

Data	Last Updated (UTC time)
Company Analysis	2022/06/27 00:00
End of Day Share Price	2022/06/27 00:00
Earnings	2022/03/31
Annual Earnings	2021/12/31