Brasil Foods SA, the world’s biggest poultry exporter, rose to a one-month high after Raymond James raised its recommendation, citing valuation, and the company confirmed it will transfer control of a unit to Marfrig Alimentos SA.
Brasil Foods advanced 2.7 percent to 33.50 reais at the close in Sao Paulo, the highest since May 11. The benchmark Bovespa index slid 0.5 percent.
“The recent selloff in shares appears overdone, and we believe that this now offers an attractive entry point, despite our forecast for weak second quarter of 2012 results,” Raymond James analysts Daniela Bretthauer and Joseph Giordano wrote in a note dated yesterday. “Shares have also underperformed other Brazilian food companies year to date, which we find unwarranted given its solid long-term fundamentals.”
Brasil Foods lost 8 percent this year, while competitor Marfrig rose 14 percent. The benchmark index fell 2.5 percent in that period.
Brasil Foods will transfer 65 percent of its Excelsior Alimentos SA unit to Marfrig on July 2, according to a regulatory filing after the market closed yesterday. The deal is the result of an exchange agreement between the companies that was already approved by Brazil’s antitrust regulator.