巴克莱美股农业行业美国农业TSN与JBS欢迎进行新时代201962125页

EquityResearch21June2019FOCUSBarclaysCapitalInc.and/oroneofitsaffiliatesdoesandseekstodobusinesswithcompaniescoveredinitsresearchreports.Asaresult,investorsshouldbeawarethatthefirmmayhaveaconflictofinterestthatcouldaffecttheobjectivityofthisreport.Investorsshouldconsiderthisreportasonlyasinglefactorinmakingtheirinvestmentdecision.ThisresearchreporthasbeenpreparedinwholeorinpartbyequityresearchanalystsbasedoutsidetheUSwhoarenotregistered/qualifiedasresearchanalystswithFINRA.PLEASESEEANALYSTCERTIFICATION(S)ANDIMPORTANTDISCLOSURESBEGINNINGONPAGE18.Restricted-InternalAmericasAgribusinessTSN&JBS:WelcomeToANewEraWeincreaseourTSNpricetargetto$100,andupgradeJBStoOWwithahigherpricetargetofR$26:DiversifiedanimalbasedproteincompaniesseemsettobenefitmostfromtheworseningAfricanSwineFever(ASF)situationinChinaandothercountriesinSoutheastAsia.Whilewebelievetheimpactin2019andearly2020islikelytobelimited,weseeincrementallymorebenefitsinthemediumtolongertermfordiversifiedproteincompanieslikeTSNandJBS.TakingasecondlookatASF–itseemsoutofcontrol:AnalyzingthemostrecentASFoutbreaksinChinaandparticularlyinVietnam,webelievethatthevirushasgonewelloutofcontroloflocalauthoritiesand,ashistoryshows,eradicatingthevirusislikelygoingtotakeyears,ifnotdecades.Weestimatethatthecurrentimpactonglobalanimal-basedproteinsupplyshouldbecloseto6%,alevelnotveryeasytoreplace.This“supplyshock”willlikelyhitintheback-halfof2020andhavesignificantimpactonproductpricinginthecomingyears–TSNandJBSwithamajorfootprintintheAmericasseemsettobenefitmost.Don’tunderestimatetheupsidepotentialfromalternativemeat:Whilestillanunderdevelopedcategory,thealternativemeatspaceinourviewpresentsplentyofopportunities;newandincumbentplayerscouldgrab~10%ofthe$1.4tnmeatmarketin10years.WithTSNjustannouncingafullyplantbasedanda“hybrid”offering,webelievethecompanyislikelytograbasignificantportionofthismarketpotential.JBS,meanwhile,hasannouncedanalternativemeatproductlaunchinBrazilandissettolaunchaproductintheU.S.laterthissummer.UpbeatmessagefromTSNmanagementatitsrecentinvestordayreaffirmsourTopPickinvestmentthesis:WhileTSNdidnotupdateitsFY19guidanceandalsodidnotyetprovideanoutlookforFY20,webelieveindustrydynamics(particularlyonthebackofglobalsupplyshortageduetoASFinChina)arefavorableandshouldallowTSNtodeliverstronggrowthintonextyear.WebelievetheimpactfromASFinChinawillbebeneficialtothecompany’schicken,beefandporksegmentsinthecomingquarters,yetassumesomecostpressureinitspreparedfoodsbusiness.JBStoOWasglobalmatters:JBSisthelargestglobalproteincompanywithamajorfootprintintheU.S.,AustraliaandBrazil,thethreelargestproteinproducingcountriesintheworld.ViaitssubsidiaryPPC,JBSoperatesinMexicoandtheU.K.Withsuchadiversifiedglobalfootprint,webelieveJBSislikelytobemoreimmunethanotherswhenitcomestotraderestrictionsandregionalheadwindssuchascrop,weatherorrawmaterialavailability.ItshouldalsoproveabeneficiarywhenitcomestofillingthevoidfromASFinChina,asJBSalreadygenerates~15%ofrevenuesinAsia(mainlyChina).INDUSTRYUPDATEAmericasAgribusinessNEUTRALUnchangedForafulllistofourratings,pricetargetandearningschangesinthisreport,pleaseseetableonpage2.Am[e-mail],[e-mail],MexicoBarclays|AmericasAgribusiness21June20192SummaryofourRatings,PriceTargetsandEarningsChangesinthisReport(allchangesareshowninbold)CompanyRatingPriceTargetEPSFY1(E)EPSFY2(E)OldNewDatePriceOldNew%ChgOldNew%ChgOldNew%ChgAmericasAgribusinessNeuNeuJBSSA(JBSS3BS/JBSS3.SA)EWOW19-Jun-201921.2516.0026.00631.681.96171.902.3725TysonFoods,Inc.(TSN)OWOW20-Jun-201978.6385.00100.00186.106.10-6.866.86-Source:BarclaysResearch.SharepricesandtargetpricesareshownintheprimarylistingcurrencyandEPSestimatesareshowninthereportingcurrency.FY1(E):CurrentfiscalyearestimatesbyBarclaysResearch.FY2(E):NextfiscalyearestimatesbyBarclaysResearch.StockRating:OW:Overweight;EW:EqualWeight;UW:Underweight;RS:RatingSuspendedIndustryView:Pos:Positive;Neu:Neutral;Neg:NegativeBarclays|AmericasAgribusiness21June20193EXECUTIVESUMMARYUpgradingJBStoOW;raisingPTforJBSandTSNby63%and18%,respectivelyDiversifiedanimalbasedproteincompaniesseemsettobenefitmostfromtheworseningAfricanSwineFever(ASF)situationinChinaandothercountriesinSoutheastAsia.Whilewebelievetheimpactin2019andearly2020islikelytobelimited,weseeincrementallymorebenefitsinthemediumtolongertermfordiversifiedproteincompanieslikeTSNandJBS.Additionally,webelievethatthesetwowillbewellpositionedtobenefitfromthetrendsinalternativemeatdemand.TSNrecentlyannouncedthelaunchofitsownpea-basedalternativemeatofferings,whichincludenotonlyaplantbasedproductbutalsoahybridoffering(see:FirstLook:TSNintroducesplantbasedandblendedproducts,June13,2019);thusweseeTSNamongthebestpositionedcompanieswithinthespace.Consequently,weincreaseourTSNpricetargetby18%to$100/share,reiteratingTSNasourTopPickinthesector.WealsoupgradeJBSfromEWtoOWandraiseourpricetargetby63%toR$26.WhywearegettingmoreupbeatbecauseofASFAnalyzingthemostrecentA