BAK - Braskem Q4: Challenging But Opportune Scenario For Patient Investors

2025-03-30 16:21:05 ET

Summary

• Braskem's net revenues fell 14% q/q and 2% y/y in 4Q24 due to reduced petrochemical spreads and lower demand.
• Despite high leverage, Braskem's $2.4 billion cash ensures debt coverage for the next 47 months, projecting operational cash recovery.
• Valuation comparison with peers suggests a 19% upside, reinforcing my buy recommendation despite challenging market conditions.
• Future margin improvements are expected through operational efficiency and capacity rationalization, with moderate gains projected for 2025.

Investment Thesis

I reiterate my recommendation to buy Braskem (NYSE: BAK ) shares after the release of its Q4 results. This article is a continuation of my inception thesis published on June 14, 2024....

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