PBR - Petrobras: Focus On The 4X P/E Ratio Not The 13% Yield (Rating Upgrade)
2024-06-20 08:16:20 ET
Summary
- Petrobras is a capital return play with solid growth potential.
- OPEC+ price support measures could boost longer-term petroleum prices, making Petrobras stock an attractive investment.
- Petrobras generated $6.5B in free cash flow in Q1 and continues to pay shareholders a healthy regular dividend.
- Shares are an absolute bargain with a P/E ratio of 4X, in the context of OPEC+'s supply curbs.
Petroleo Brasileiro S.A. - Petrobras ( PBR ) is a Brazilian energy company with a long-term plan in place to grow energy production. Petrobras is chiefly a capital return play for investors and is seeing solid strength in key metrics such as EBITDA or free cash flow. OPEC+ recently made a favorable decision with regard to its supply dynamics, which could lead to an up-trend in petroleum prices... from which Petrobras could also benefit as a large-scale energy producer. I believe that shares of Petrobras are a solid buy, in the context of OPEC+ curbing supplies, and I would recommend investors focus on valuation upside instead of the 13% forward dividend yield!...
Petrobras: Focus On The 4X P/E Ratio, Not The 13% Yield (Rating Upgrade)