JBS' (JBS) outlook for 2027 and 2028 is brighter as US beef margins are likely to deliver healthier contributions and imports of cattle for Mexico improving supply next year, UBS said in a Sunday research report.

The company's proposal to acquire the remaining 18% of Pilgrim's Pride (PPC) shares is positive, given the simplification of corporate structure and potential commercial synergies, according to the note.

The risk of the proposal advancing or not is "hard to price in," UBS said, noting that Pilgrim's Pride has formed a special committee of the board to evaluate the deal.

The lack of premium to where the stocks were trading may be complemented by a bump by JBS, which could be "slightly negatively received" by investors, the analysts said.

UBS reiterated a buy rating on the stock and boosted its price target to $17.50 from $17.

Price: 14.00, Change: +0.18, Percent Change: +1.30