Bloomberg News

Brasil Foods Posts Biggest Gain in Two Months After Rating

October 06, 2011

(Updates with closing prices in second paragraph.)

Oct. 6 (Bloomberg) -- BRF-Brasil Foods SA, Brazil’s biggest maker of microwave dinners and frozen meat products, posted its biggest gain in two months after Barclays Capital began coverage of the shares with an “overweight” rating.

Brasil Foods advanced 3.6 percent to 32.14 reais in Sao Paulo trading at 4:15 p.m. New York time. The shares are up 18 percent this year.

The company, formed from the merger of Perdigao and Sadia SA, should benefit from “pricing power” and advantages stemming from a market share that exceeds that of competitors, Barclays analyst Gabriel Vaz de Lima wrote in a report dated yesterday.

Brasil Foods’s size will help insulate it from pressure to offer price discounts, boosting revenue, Barclays said. Net income will rise in the fourth quarter because of lower grain prices and a weaker real, which bolsters profit margins on exports, the bank said.

Barclays assigned a 12-month price target of 43 reais on the shares.

--With assistance from Alexander Cuadros in Sao Paulo. Editors: Brendan Walsh, Glenn J. Kalinoski

To contact the reporter on this story: Leon Lazaroff in New York llazaroff@bloomberg.net

To contact the editor responsible for this story: David Papadopoulos at papadopoulos@bloomberg.net


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