Marfrig Global Foods (BOVESPA:MRFG3) - Share price, News & Analysis

MRFG3 fundamental analysis
Snowflake Score
Valuation	5/6
Future Growth	1/6
Past Performance	2/6
Financial Health	3/6
Dividends	4/6

MRFG3 Stock Overview

Marfrig Global Foods S.A., through its subsidiaries, operates in the food and food service industries in Brazil, the United States, Uruguay, and Argentina.

Rewards

Trading at 60.6% below our estimate of its fair value

Earnings have grown 67.6% per year over the past 5 years

Risk Analysis

Earnings are forecast to decline by an average of 21.6% per year for the next 3 years

Has a high level of debt

Unstable dividend track record

Marfrig Global Foods Competitors

Price History & Performance

Summary of all time highs, changes and price drops for Marfrig Global Foods
Historical stock prices
Current Share Price	R$12.80
52 Week High	R$28.06
52 Week Low	R$12.28
Beta	0.56
1 Month Change	-14.50%
3 Month Change	-36.54%
1 Year Change	-32.95%
3 Year Change	103.50%
5 Year Change	89.35%
Change since IPO	-30.09%

Recent News & Updates

Mar 28

We Think Marfrig Global Foods (BVMF:MRFG3) Is Taking Some Risk With Its Debt

The external fund manager backed by Berkshire Hathaway's Charlie Munger, Li Lu, makes no bones about it when he says...

Shareholder Returns

	MRFG3	BR Food	BR Market
7D	-3.8%	-0.8%	-0.8%
1Y	-32.9%	-7.5%	-29.7%

Return vs Industry: MRFG3 underperformed the BR Food industry which returned -9.6% over the past year.

Return vs Market: MRFG3 underperformed the BR Market which returned -31.2% over the past year.

Price Volatility

Is MRFG3's price volatile compared to industry and market?
MRFG3 volatility
MRFG3 Average Weekly Movement	5.9%
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: MRFG3 is not significantly more volatile than the rest of BR stocks over the past 3 months, typically moving +/- 6% a week.

Volatility Over Time: MRFG3's weekly volatility (6%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
1986	31,779	Miguel de Souza Gularte	https://www.marfrig.com.br

Marfrig Global Foods S.A., through its subsidiaries, operates in the food and food service industries in Brazil, the United States, Uruguay, and Argentina. It produces, processes, distributes, and sells animal-based proteins, such as beef, lamb, and fish, as well as plant-based proteins; and various other food products, including frozen vegetables, sheep, fish, and sauces. The company also engages in energy trading and associated, leasing transportation, and leather processing services.

Marfrig Global Foods Fundamentals Summary

How do Marfrig Global Foods's earnings and revenue compare to its market cap?
MRFG3 fundamental statistics
Market Cap	R$8.45b
Earnings (TTM)	R$4.17b
Revenue (TTM)	R$90.49b

2.0x

P/E Ratio

0.1x

P/S Ratio

Is MRFG3 overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
MRFG3 income statement (TTM)
Revenue	R$90.49b
Cost of Revenue	R$72.06b
Gross Profit	R$18.43b
Other Expenses	R$14.26b
Earnings	R$4.17b

Last Reported Earnings

Mar 31, 2022

Next Earnings Date

Aug 11, 2022

Earnings per share (EPS)	6.32
Gross Margin	20.37%
Net Profit Margin	4.61%
Debt/Equity Ratio	643.6%

How did MRFG3 perform over the long term?

See historical performance and comparison

Dividends

29.7%

Current Dividend Yield

62%

Payout Ratio

We’ve recently updated our valuation analysis.

Valuation

Is MRFG3 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 MRFG3?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for MRFG3. This is calculated by dividing MRFG3's market cap by their current preferred multiple.
What is MRFG3's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	R$8.45b

MRFG3 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	2.2x
PEG Ratio	-0.09x

Price to Earnings Ratio vs Peers

How does MRFG3's PE Ratio compare to its peers?

MRFG3 PE Ratio vs Peers

The above table shows the PE ratio for MRFG3 vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	12.7x

Forward PE

Price-To-Earnings vs Peers: MRFG3 is good value based on its Price-To-Earnings Ratio (2x) compared to the peer average (12.7x).

Price to Earnings Ratio vs Industry

How does MRFG3's PE Ratio compare vs other companies in the Food Industry?

Price-To-Earnings vs Industry: MRFG3 is good value based on its Price-To-Earnings Ratio (2x) compared to the BR Food industry average (8.4x)

Price to Earnings Ratio vs Fair Ratio

What is MRFG3'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.

MRFG3 PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	2x
Fair PE Ratio	6.6x

Price-To-Earnings vs Fair Ratio: MRFG3 is good value based on its Price-To-Earnings Ratio (2x) compared to the estimated Fair Price-To-Earnings Ratio (6.6x).

Share Price vs Fair Value

What is the Fair Price of MRFG3 when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: MRFG3 (R$12.8) is trading below our estimate of fair value (R$32.48)

Significantly Below Fair Value: MRFG3 is trading below fair value by more than 20%.

Price to Earnings Growth Ratio

PEG Ratio: MRFG3's earnings are forecast to decline next year, so we can't calculate its PEG ratio.

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Future Growth

How is Marfrig Global Foods forecast to perform in the next 1 to 3 years based on estimates from 12 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

-21.6%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: MRFG3's earnings are forecast to decline over the next 3 years (-21.6% per year).

Earnings vs Market: MRFG3's earnings are forecast to decline over the next 3 years (-21.6% per year).

High Growth Earnings: MRFG3's earnings are forecast to decline over the next 3 years.

Revenue vs Market: MRFG3's revenue (4.2% per year) is forecast to grow slower than the BR market (5.7% per year).

High Growth Revenue: MRFG3's revenue (4.2% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: MRFG3's Return on Equity is forecast to be high in 3 years time (25.4%)

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Past Performance

How has Marfrig Global Foods performed over the past 5 years?

Past Performance Score

2/6

Past Performance Score 2/6

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

67.6%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: MRFG3 has high quality earnings.

Growing Profit Margin: MRFG3's current net profit margins (4.6%) are lower than last year (5.2%).

Past Earnings Growth Analysis

Earnings Trend: MRFG3 has become profitable over the past 5 years, growing earnings by 67.6% per year.

Accelerating Growth: MRFG3's earnings growth over the past year (12.2%) is below its 5-year average (67.6% per year).

Earnings vs Industry: MRFG3 earnings growth over the past year (12.2%) underperformed the Food industry 54%.

Return on Equity

High ROE: Whilst MRFG3's Return on Equity (129.79%) is outstanding, this metric is skewed due to their high level of debt.

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Financial Health

How is Marfrig Global Foods's financial position?

Financial Health Score

3/6

Financial Health Score 3/6

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

Financial Position Analysis

Short Term Liabilities: MRFG3's short term assets (R$21.2B) exceed its short term liabilities (R$16.4B).

Long Term Liabilities: MRFG3's short term assets (R$21.2B) do not cover its long term liabilities (R$27.1B).

Debt to Equity History and Analysis

Debt Level: MRFG3's net debt to equity ratio (427%) is considered high.

Reducing Debt: MRFG3's debt to equity ratio has increased from 425.4% to 643.6% over the past 5 years.

Debt Coverage: MRFG3's debt is well covered by operating cash flow (31.8%).

Interest Coverage: MRFG3's interest payments on its debt are well covered by EBIT (8.7x coverage).

Balance Sheet

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Dividend

What is Marfrig Global Foods's current dividend yield, its reliability and sustainability?

Dividend Score

4/6

Dividend Score 4/6

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

29.75%

Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: MRFG3's dividend (29.75%) is higher than the bottom 25% of dividend payers in the BR market (1.74%).

High Dividend: MRFG3's dividend (29.75%) is in the top 25% of dividend payers in the BR market (7.74%)

Stability and Growth of Payments

Stable Dividend: Too early to tell whether MRFG3's dividend payments have been stable as they only just started paying a dividend.

Growing Dividend: Too early to tell if MRFG3's dividend payments are increasing as they only just started paying a dividend.

Earnings Payout to Shareholders

Earnings Coverage: With its reasonable payout ratio (61.7%), MRFG3's dividend payments are covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: With its reasonably low cash payout ratio (30.3%), MRFG3'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?

2.3yrs

Average management tenure

CEO

Miguel de Souza Gularte (62 yo)

2.25yrs

Tenure

Mr. Miguel de Souza Gularte serves as Chief Executive Officer and Member of Board of Executive Officers at Marfrig Global Foods S.A. since March 2020 and was its Chief Executive Officer of the South Ameri...

Leadership Team

Experienced Management: MRFG3's management team is considered experienced (2.3 years average tenure).

Board Members

Experienced Board: MRFG3's board of directors are seasoned and experienced ( 12.5 years average tenure).

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	2022/06/24 00:00
End of Day Share Price	2022/06/24 00:00
Earnings	2022/03/31
Annual Earnings	2021/12/31