JBS (JBSS32) Receives High Ratings from Investment Banks Despite U.S. Beef Headwinds

JBS S.A. (JBSS32), the world's largest meatpacker, has received high ratings from top-tier investment banks BTG Pactual and Itaú BBA, signaling confidence in the company’s long-term outlook despite anticipated weakness across the sector driven by challenging U.S. beef market dynamics. The positive assessments come even as the meatpacking industry grapples with an acute and prolonged cattle shortage in the United States, which has led to high cattle prices, depressed margins, and forced facility closures elsewhere in the market.

The investment thesis centers on the sheer scale and geographic diversification of JBS, arguing that its current valuation heavily discounts the long-term earnings power of the business. While the U.S. beef segment is expected to remain a drag on second-quarter earnings, the company's profitable operations in Brazil, Australia, and its Pilgrim's Pride-led global poultry and pork divisions are forecast to provide a crucial offset. Analysts believe the current share price already reflects a worst-case scenario for the U.S. segment.

The sentiment on JBS contrasts with a more guarded view on its Brazilian peers. Both Itaú BBA and BTG Pactual have expressed a more reserved outlook for Marfrig/BRF (MBRF3) and Minerva Foods (BEEF3), underscoring the preference for JBS’s balanced portfolio. However, Itaú BBA forecasts Marfrig/BRF to deliver the best relative operating performance in the second quarter, projecting R$2.6 billion in Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA), largely driven by a strong Brazilian chicken market.

The positive call on JBS comes on a mixed day for the wider Brazil stock market, where the benchmark Ibovespa index recorded a modest gain of 0.47% to 177,999.0 points, while the iShares MSCI Brazil ETF (EWZ) was up 0.33% to $36.65. This resilience in JBS's rating suggests that major investors are positioning for a recovery that is tied not only to the end of the U.S. cattle cycle but also to the strength of its global non-beef segments.

Investors will now be watching closely for the Q2 2026 earnings reports, which will provide the concrete data on how effectively JBS’s diversification strategy shielded it from the operational challenges in the U.S. beef segment. Key indicators to watch in the report include the performance of its pork and poultry units and any management commentary regarding the expected timeline for a margin recovery in its North American beef division later in the second half of 2026.