Senior Credit Analyst - Emerging Markets, EM Spreads

Leandro Gubler

Senior Credit Analyst - Emerging Markets

EM Spreads

Credit

<ul>
<li>We move JBS to Neutral from Overweight as intermediate bonds rerated while leverage weakened, with company-defined net leverage at 3.10x, above management’s 2.0x–3.0x target.</li>
<li>2Q26 revenues rose 13.8% YoY to $23.9bn, but adjusted EBITDA fell 18.5%; sequential recovery and positive $130mn free cash flow partially offset weaker trailing credit metrics.</li>
<li>Liquidity remains a key support, with roughly $7.7bn available, 15.3-year average debt maturity and limited near-term refinancing pressure, giving JBS time for earnings normalization.</li>
</ul>


We move JBS to Neutral from Overweight as intermediate bonds rerated while leverage weakened, with company-defined net leverage at 3.10x, above management’s 2.0x–3.0x target.
2Q26 revenues rose 13.8% YoY to $23.9bn, but adjusted EBITDA fell 18.5%; sequential recovery and positive $130mn free cash flow partially offset weaker trailing credit metrics.
Liquidity remains a key support, with roughly $7.7bn available, 15.3-year average debt maturity and limited near-term refinancing pressure, giving JBS time for earnings normalization.


JBS 2Q26: Cash Generation Returns, Deleveraging Does Not

Independent research on the U.S. markets, Baptista Research

Baptista Research

Independent research on the U.S. markets

Baptista Research is an independent financial research house focused on the U.S. markets. We provide equity research as well as credit research reports on the top-listed U.S. companies with most of our focus on technology, consumer goods and services, automobiles, industrials, oil and gas, pharma, and healthcare. Our research has served more than 3000 institutional investors including mutual funds, hedge funds, banks, family offices, and various buy-side firms. We operate a research subscription service where institutions, as well as retail investors, can have priority access to all our research. We also have a wide distribution of our research reports across some of the top global financial platforms. Apart from equity research and credit research, we also provide advisory services with respect to mergers & acquisitions (M&A), private equity/ venture capital fundraising, valuation reports, and investment management services for corporates.
Baptista Research is owned and managed by Ishan Majumdar, an ex-Venture Capitalist/ Investment Banker, a Chartered Accountant, and a Masters’ degree holder in Management from HEC Paris. Ishan has nearly a decade of experience in Mergers and Acquisitions, Leveraged Buyouts (LBOs), Venture Capital Investing, Corporate Strategy, and Valuation in front-office roles at the likes of BNP Paribas CIB, Credit Agricole CIB, Groupe Danone, and TIW Private Equity. He has worked on and closed multiple acquisition deals, leveraged buyouts, and start-up investment transactions.

Equity Bottom-Up

<ul><li>JBS S.A. reported second-quarter 2026 results amid a complex global environment involving regional supply-demand imbalances, currency volatility, trade disruptions, and geopolitical challenges.</li><li>Adjusted net income excluding nonrecurring items was USD 218 million.</li><li>Adjusted EBITDA totaled USD 1.43 billion under IFRS with a 6% margin and USD 1.3 billion under U.S. GAAP with a 5.3% margin.</li></ul>

JBS S.A. reported second-quarter 2026 results amid a complex global environment involving regional supply-demand imbalances, currency volatility, trade disruptions, and geopolitical challenges.Adjusted net income excluding nonrecurring items was USD 218 million.Adjusted EBITDA totaled USD 1.43 billion under IFRS with a 6% margin and USD 1.3 billion under U.S. GAAP with a 5.3% margin.

JBS & Danantara Go Big On Southeast Asia — A $2.5 Billion Expansion Play!

<ul><li>JBS N.V., the world’s largest meatpacker, is making a fresh push to tighten its grip on the global protein market by proposing to acquire the roughly 18% of Pilgrim’s Pride Corporation (NASDAQ:PPC) that it does not already own.</li><li>JBS currently controls about 82% of the poultry producer, but the proposed transaction would eliminate Pilgrim’s remaining public ownership and ultimately remove its shares from Nasdaq.</li><li>Under the proposal, minority shareholders would receive approximately 2.1 JBS Class A shares for each Pilgrim’s share, turning owners of a largely poultry-focused company into investors in a much broader global protein platform.</li></ul>

JBS N.V., the world’s largest meatpacker, is making a fresh push to tighten its grip on the global protein market by proposing to acquire the roughly 18% of Pilgrim’s Pride Corporation (NASDAQ:PPC) that it does not already own.JBS currently controls about 82% of the poultry producer, but the proposed transaction would eliminate Pilgrim’s remaining public ownership and ultimately remove its shares from Nasdaq.Under the proposal, minority shareholders would receive approximately 2.1 JBS Class A shares for each Pilgrim’s share, turning owners of a largely poultry-focused company into investors in a much broader global protein platform.

JBS Wants The Final 18% Of Pilgrim’s Pride—Why The Timing Is Fascinating!

Smartkarma AI Primers, Smartkarma

αSK Primers

Smartkarma AI Primers

Smartkarma

Smartkarma unites the fragmented investment industry, connecting institutional investors, independent research providers, and corporates within a single network.

Research Reinvented

<ul>
  <li>
<a href="https://smartkarma.com/entities/jbs-n-v">JBS</a>'s position as a leading global diversified protein producer provides significant scale and scope advantages, underpinning its wide economic moat. Its operations span across beef, poultry, and pork in key geographies, which helps mitigate risks associated with any single protein or region.</li>
  <li>The company is currently facing significant headwinds in its U.S. beef operations due to a cyclical low in the cattle herd, which has compressed margins. However, this is being partially offset by strong performance in its Brazil and Seara business units.</li>
  <li>Persistent and significant corporate governance concerns, stemming from the controlling Batista family's involvement in past corruption scandals, represent a material risk for institutional investors and weigh on the company's valuation.</li>
</ul><p><em>This content is AI-generated and displayed for general informational purposes only. Please verify independently before use.</em></p>


  
JBS's position as a leading global diversified protein producer provides significant scale and scope advantages, underpinning its wide economic moat. Its operations span across beef, poultry, and pork in key geographies, which helps mitigate risks associated with any single protein or region.
  The company is currently facing significant headwinds in its U.S. beef operations due to a cyclical low in the cattle herd, which has compressed margins. However, this is being partially offset by strong performance in its Brazil and Seara business units.
  Persistent and significant corporate governance concerns, stemming from the controlling Batista family's involvement in past corruption scandals, represent a material risk for institutional investors and weigh on the company's valuation.
This content is AI-generated and displayed for general informational purposes only. Please verify independently before use.

<ul><li>JBS N.V. is facing one of the strangest contradictions in the food business: Americans are paying record prices for beef, yet the world’s largest meat processor is closing plants and cutting capacity.</li><li>The company recently announced plans to shut its beef-processing plant in Souderton, Pennsylvania, and a value-added facility in Memphis, Tennessee, shifting production to other locations in its network.</li><li>On the surface, that sounds illogical.</li></ul>

JBS N.V. is facing one of the strangest contradictions in the food business: Americans are paying record prices for beef, yet the world’s largest meat processor is closing plants and cutting capacity.The company recently announced plans to shut its beef-processing plant in Souderton, Pennsylvania, and a value-added facility in Memphis, Tennessee, shifting production to other locations in its network.On the surface, that sounds illogical.

JBS Faces A Brutal Beef Paradox Investors Can’t Ignore!

United States

JBS N.V. operates as a meat processing company. The Company produces and delivers fresh and frozen beef, poultry, pork, fish, and lamb products to retailers and food-service customers. JBS serves customers worldwide.

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JBS (JBS US)

JBS 2Q26: Cash Generation Returns, Deleveraging Does Not

JBS cash generation recovered in 2Q26, but leverage remains elevated and valuation has tightened. We move to Neutral while retaining selective long...

Leandro Gubler

JBS & Danantara Go Big On Southeast Asia — A $2.5 Billion Expansion Play!

JBS S.A. reported second-quarter 2026 results amid a complex global environment involving regional supply-demand imbalances, currency volatility,...

Baptista Research

JBS Wants The Final 18% Of Pilgrim’s Pride—Why The Timing Is Fascinating!

JBS N.V., the world’s largest meatpacker, is making a fresh push to tighten its grip on the global protein market by proposing to acquire the...

Baptista Research

Primer: JBS (JBS US) - Aug 2026

JBS's position as a leading global diversified protein producer provides significant scale and scope advantages, underpinning its wide economic...

αSK Primers

JBS Faces A Brutal Beef Paradox Investors Can’t Ignore!

JBS N.V. is facing one of the strangest contradictions in the food business: Americans are paying record prices for beef, yet the world’s largest...

Baptista Research

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