UBS raises JBS stock price target on improved 2027-28 outlook

UBS has increased its price target for JBS SA (NYSE:JBS) to $17.50 from $17.00, while maintaining a Buy rating. The stock is currently trading at $13.98, and according to InvestingPro analysis, it appears undervalued based on its Fair Value assessment. The analyst, Matheus Enfeldt, believes that the company's outlook for 2027 and particularly 2028 has improved due to better-than-expected Seara margins and steady Friboi, despite challenges in PPC.

Signs of improvement in US beef operations have also started to emerge, with cattle imports from Mexico expected to boost supply in 2027 and initial cow retention. JBS is expected to have US beef margins close to 0% in 2027, with healthier contributions in 2028. The firm notes that JBS trades at a 5% free cash flow yield in 2027, which rises to 10% in 2028, with the company's current free cash flow yield at 3%.

UBS also mentioned efficiency gains captured by the company, with JBS expected to acquire the remaining 18% of Pilgrim’s Pride Corporation shares it doesn't own, valuing each Pilgrim’s Pride share at $28.49. Despite a recent earnings miss, JBS reported record net sales of $24 billion for the second quarter of 2026, positive free cash flow, and an Overweight rating from Stephens.