Petrobras (PETR4): UBS BB double downgrade, recommending a buy share and cutting the price by 53%; the property decreases by 3%
After a lot of market mistrust in Petrobras (PETR3; PETR4), UBS BB analysts issued a double downgrade for the firm’s most popular shares, from buy to promote, in the report referred to as “the phoenix returns to its nest” .
Analysts Luiz Carvalho, Matheus Enfeldt and Tasso Vasconcellos additionally reduce the price of the property by 53%, from BRL 47 to BRL 22, in view of the change coming in the path of the firm. This fastened price, bearing in mind the price change (the earlier session this Tuesday, the twenty second), is equal to a lower of 6.5% to the final closing price.
The firm’s shares recorded the fall of the session this Tuesday, with PETR3 down 3.33%, at R$ 26.11, whereas PETR4 belongings fell by 3.06%, at R$ 22.80 , and buyers exit the asset after the share trades at earlier income. .
The evaluation group remembers that the information about Petrobras inventory began on a optimistic observe in 2016, sustaining a optimistic outlook for many of that point, primarily based on a three-point thesis classes: 1) credit score adjustments and higher administration and supply (with a lower in credit score. from $120 billion to $54 billion); 2) giant distribution prices (over $47 billion as of early 2021); and 3) a optimistic analysis of his friends. “Six years have handed, and we consider that these sectors are on a revolutionary path”, and the subsequent few years look gloomy, analysts concluded.
Three areas of change are forcing the financial institution to scale back the advice: oil costs, investments and wages. “None of that is clear for now; nevertheless, the info of the trade social gathering [do novo governo, de Luiz Inácio Lula da Silva] present some concepts and, the historical past of Petrobras, we will likely be very cautious”, emphasised Carvalho, Enfeldt and Vasconcellos.
As for gasoline prices, there was no rationalization for the firm’s new pricing coverage, and analysts’ plan to compress margins. They additionally assume that there’s a lot of danger in increased investments. “Increased investments and the push to hook up with renewable vitality and vitality transition will make Petrobras need ‘extra’ and this will likely be a concern above”, he concluded.
In addition, it means decrease dividends for shareholders, and analysts estimate that Petrobras pays a dividend (dividend associated to earnings) of 25%, no less than established by regulation.
The new common price is predicated on the unfavourable impression of BRL 10 and the intention to compress the waste margin, along with the unfavourable impression of BRL 6 from price will increase (returning to the ranges in seen earlier than 2019), along with unfavourable BRL 6 and the worst outlook for exploration and manufacturing, and financial weak point resulting from the increased share of PES in operations.
It ought to be famous that, along with UBS BB, Itaú BBA additionally strengthened the cautious view on Petrobras, however nonetheless maintains a advice. commerce (engaged on the market common, equal to uncertainty) and a price of BRL 38 for PETR4.
“We consider that there could also be a change in the firm’s pricing coverage that may have a materials impression (particularly if the pricing coverage proposal strikes ahead primarily based on the manufacturing value). Considering the uncertainty about the way forward for the firm’s pricing coverage, we consider that that is a main danger for Petrobras’ funding historical past. We repeat our advice to commerce for work, whereas we anticipate extra readability on the way forward for the firm, particularly on the pointers for the remuneration coverage and capital distribution”, he identified.
Bradesco BBI talked about in a transient assertion that the shares of the firm are being bought earlier than the dividends right now. The whole dividend introduced is R$3.35 per share, which signifies that the share adjustment ought to be 11% for ON shares and 12.51% for PN shares.
For analysts, buyers will be unable to recoup most of the charges acquired, due to the larger dangers seen in the funding case in the subsequent 12 months.
The view is in keeping with the evaluation of different specialists mentioned by the InfoMoney doesn’t require the funds to be invested in new Petrobras shares.
Flávio Conde, from Levante, advises buyers to use the funds acquired from Petrobras to Eletrobras (ELET6) to scale back the danger of portfolio and oil costs.
At VG Research, purchasers are suggested to reinvest dividends in different firms. According to Luan Alves, there are higher choices that don’t exceed the secure ceiling price.