MBRF (MBRF3) Soars Over 20% for Second Day as Sadia Halal Venture Fuels Investor Frenzy
- Why is MBRF stock suddenly on fire?
- What exactly does the Sadia Halal deal involve?
- How are analysts interpreting this move?
- Is MBRF still worth buying at current levels?
- What's the smart money watching next?
- Frequently Asked Questions
Shares of MBRF (MBRF3) skyrocketed more than 20% on October 29, 2025, marking the second consecutive day of explosive gains following the creation of Sadia Halal - a strategic joint venture with Saudi Arabia's sovereign wealth fund. The $2.07 billion deal positions MBRF to dominate the lucrative halal food market in the Middle East, with analysts debating whether the stock's meteoric rise still has room to run. We break down the game-changing transaction, Wall Street's mixed reactions, and whether this Brazilian protein powerhouse is still a buy at current levels.
Why is MBRF stock suddenly on fire?
The fireworks began on October 28 when MBRF - the protein giant formed by the merger of Marfrig and BRF - announced it WOULD expand its BRF Arabia joint venture with Saudi Arabia's Halal Products Development Company (HPDC). The rebranded Sadia Halal operation gives MBRF 90% control of a business valued at 9x EV/EBITDA, a whopping 60% premium to the company's current multiple. "This isn't just about halal chicken nuggets," notes BTCC analyst Rafael Costa. "We're talking about MBRF planting its flag in the Middle East's $7 trillion food market with the Saudi sovereign fund as its dance partner."
What exactly does the Sadia Halal deal involve?
The transaction stitches together factories, distributors, and export businesses across the MENA region that are projected to generate $2.1 billion in revenue and $230 million in EBITDA by 2025. The crown jewel? A planned 2027 IPO on the Saudi exchange where local competitors trade at 9.4x EBITDA. "They're essentially taking a Brazilian business and giving it a Middle Eastern valuation multiple," explains Goldman's Thiago Bortoluci. The deal also includes an additional $430 million capital injection from HPDC, though Itaú BBA cautions this won't immediately MOVE the needle on MBRF's capital structure.
How are analysts interpreting this move?
Wall Street's reaction reads like a split decision:
| Institution | Rating | Price Target | Upside |
|---|---|---|---|
| Goldman Sachs | Buy | R$27.80 | 73.75% |
| Safra | Buy | R$30.50 | 90.63% |
| Bank of America | Neutral | R$26.00 | 62.50% |
| BTG Pactual | Neutral | R$20.00 | 25.00% |
Source: TradingView as of October 29, 2025
The bulls see Sadia Halal as MBRF's golden ticket to higher-margin processed foods and insulation from volatile chicken cycles. "This gives them a 'cost-plus' pricing model in a region where consumers don't blink at premium protein prices," argues Safra's team. The skeptics counter that much of the upside is already baked into the stock after its 26% two-day surge.
Is MBRF still worth buying at current levels?
Here's where analysts get cagey. Ágora Investimentos maintains a neutral stance, citing rich valuations and softening protein demand. BTG sees the strategic merit but warns the 9x EBITDA multiple for Sadia Halal implies the JV represents 17% of MBRF's enterprise value while contributing just 7% of sales. "It's a brilliant long-term play," concedes XP's Pedro Fonseca, "but short-term, we're watching chicken margins and National Beef's performance."
What's the smart money watching next?
All eyes are on three catalysts: (1) The 2027 Saudi IPO timeline, (2) MBRF's ability to cross-sell beef through the new distribution channels, and (3) whether this deal finally solves the company's leverage concerns. As one trader put it: "They've got the Saudi crown prince as a business partner now - either this becomes the Tesla of halal food or we're all going to look like overexcited tourists at a desert mirage."
Frequently Asked Questions
Why did MBRF stock jump 20%?
MBRF shares surged after announcing the Sadia Halal joint venture with Saudi Arabia's sovereign wealth fund, which gives the company dominant exposure to the fast-growing Middle Eastern halal food market.
Is MBRF a good long-term investment?
Analysts are divided - while the Sadia Halal deal provides strategic positioning in a premium market, some believe the stock's recent run-up already reflects much of the near-term upside potential.
When will Sadia Halal go public?
The current plan calls for an IPO on the Saudi exchange in 2027, where similar companies trade at significantly higher valuations than MBRF's current multiple.
What are the risks with MBRF stock?
Key risks include volatile chicken prices, high leverage ratios, and execution challenges in integrating the Middle Eastern operations.
