After taking a hit from Shufersal, IBI predicts: "Baladi will jump by 40%"
IBI investment house retail analyst Yuval Gur-Arye identifies an opportunity in the shares of meat producer Baladi, precisely after the drop it suffered following the split from Shufersal. What is behind the recommendation, and why does the investment house believe the market overreacted?
The IBI investment house sees the shares of Baladi, a meat producer and importer controlled by Erez Dahabani, as a buying opportunity. The house's retail analyst, Yuval Gur-Arye, set a target price for the stock of 70 shekels — a figure that reflects a potential upside of nearly 40% relative to the price at which the stock is currently trading. The recommendation comes at an interesting time: just a few weeks after the stock took a hard hit when a major client announced it was leaving.
The shock began when Shufersal, the largest retail chain in Israel, announced it would stop purchasing meat from Baladi and would switch to importing chilled meat cuts from South America itself. For Baladi, this was not marginal news: within two years, Shufersal had become a material client, responsible for about 12% of the company's sales in 2025 — about 181 million shekels — compared to only 2% in 2023.
The market reacted nervously. The stock plunged by about 9.5% on the day of the announcement, and despite a reassuring statement the company rushed to publish, it closed with a decline of more than 3%. Later it turned out that the rift was even deeper: Baladi also did not win Shufersal's internal tender for the production of its private label, so its products are also disappearing from the chain's refrigerators.
The main argument of Gur-Arye and IBI is that the market priced the damage too severely. Losing a client that accounts for 12% of sales is painful, but Baladi relies on a wide distribution of clients in both the retail and institutional markets. The company itself stated that the demand for its products is higher than what the slaughter and kashrut teams can provide, meaning the quantities that will become available can be directed to other clients.
The business data supports this call. In the first half of 2026, Baladi recorded revenues of about 767.9 million shekels, an increase of 2.3%, while net profit jumped by about 45% to about 80.8 million shekels. The gross profit margin climbed to 25.4%, compared to 20.7% in the corresponding period — a significant improvement in profitability that points to real efficiency, not just growth in turnover. The company even announced a dividend.
For those considering exposure to the stock, IBI's recommendation presents a story of a gap between market perception and actual performance: a stock that was punished for one piece of bad news, while its profit engines continue to run. The target price of 70 shekels reflects confidence that the company will succeed in compensating for the loss of Shufersal.
However, it is important to remember the risks. Shufersal is not the only client that may consider independent import — a move that could erode the intermediary role that Baladi fills. In addition, the company is exposed to regulation in the field of kosher meat import and to fluctuations in the dollar exchange rate, which has benefited it recently but could turn around.
