PBR - Petrobras: The Sell-Off Provides Opportunity
2024-04-02 05:34:11 ET
Summary
- In recent weeks, Petrobras's momentum has weakened, and at the moment, it's trading 14% off-high after a wave of analyst downgrades followed dividend frustration.
- PBR delivered strong financial performance last year with the second-highest EBITDA ($52.4 billion), operational cash flow ($43.2 billion), and net profit ($24.9 billion) in history.
- The market is expecting a further correction in the company's financials, but this may be already reflected in its forwarding valuation multiples.
- Despite risks, I think Petrobras is still undervalued and presents a buying opportunity with double-digit percentage upside potential.
Intro & Thesis
Petrobras ( PBR ) ( PBR.A ) stock, or Petróleo Brasileiro S.A. stock, has a very volatile market trading history: In the last 5 years, it lost up to 75% of its peak (during the COVID crisis), but then systematically restored all lost gains since mid-2020 and managed to reach new local 5-year highs in 2024. In recent weeks, however, PBR stock's momentum has weakened and at the moment it is trading 14% off-high after a wave of analyst downgrades followed dividend frustration: