SAO PAULO (Reuters) – Petrobras shares were among the biggest falls on the Ibovespa this Tuesday, despite the recovery in oil prices abroad, extending losses since the historic highs recorded in October, in the face of persistent concerns about the course of the company from 2023.
UBS analysts also cut the share recommendation to “sell” from “buy” previously, as well as cut the target price of preferred shares from 47 to 22 reais, in a report released late on Monday.
They argued that they began coverage of Petrobras with a positive outlook in 2016, which has been maintained for the most part since then, on the back of factors such as a debt-to-equity shift from improved operating free cash and divestments, as well as significant payouts. of dividends and potentially positive re-rating.
“Six years have passed and now we believe that these phases are on the way to reversal, with the coming years looking darker than the peaks that Petrobras reached”, stated Luiz Carvalho and team.
UBS follows the movement of other analysts –albeit more aggressively– who have also already cut recommendations or price targets for the state-controlled oil company after the victory of Luiz Inácio Lula da Silva for the presidency of the country on October 30, between they are those of Goldman Sachs, JPMorgan and BTG Pactual.
Lula, who takes office on January 1, has already signaled that he intends to make a radical change at Petrobras.
Sources told Reuters that Lula plans a broad exchange in the first and second echelons of the company and that at least part of the astronomical dividends being paid by the state-owned company to shareholders in the wave of high oil prices will be directed to investments.
Since the peaks recorded on October 21, Petrobras’ preferred shares have accumulated a drop of more than 30%. This Tuesday, at around 10:55 am, they were trading at 22.78 reais, down 3.15%, while ordinary shares retreated 3.78%, at 26 reais.
At the same time, the Ibovespa had an increase of 0.03%, while, abroad, Brent oil, the reference used by the company, advanced 2.12%, to 89.3 dollars a barrel.
UBS analysts cited “three transformational points” to justify the double downgrade in the stock recommendation: fuel prices, investment and overhead.
“None of this is clear for now; however, the first comments from the transition team provide some information and, looking back at Petrobras, we become substantially more cautious.”
They stated that there is no definition of the company’s new pricing policy, while they assess that an important risk lies in higher investments, since, in the past, Petrobras has not been able to diversify the profitability of non-essential integrated oil, a trend that could return .
“Greater investments and a drive to diversify into renewables and energy transition would require Petrobras to become ‘bigger’, and overheads – which had been neglected by the market in recent years – become a concern.”
The UBS team also mused that this would mean lower dividends for shareholders.
(Reporting by Paula Arend Laier)
#Petrobras #retreats #strongly #relegation #UBS #sees #dark #years #ISTOÉ #DINHEIRO