The actions of Petrobras (PETR3;PETR4) plummeted on Friday (23), driven by the collapse of Petroleum in international markets amid renewed fears of a global recession.
With PETR3 melting 7% and PETR4 falling 6.26%, the company lost BRL 30 billion in market value in the face of global panic.
In addition to downward pressure on oil, Petrobras is experiencing the turmoil of elections presidential elections in Brazil, with the first round scheduled for next Sunday (2).
In the evaluation of Guide Investments, this year’s elections will be less impactful for state actions compared to previous years. However, the market is aware that, in electoral periods, the shares of state-owned companies tend to fall.
According to the broker, the shares of state-owned companies have little room for growth in the event of a positive post-election scenario, as they already have a good performance in the year, and plenty of room for a fall within a negative post-election scenario.
“We believe that there are many differences between these companies today and in 2014 (currently state-owned companies are showing record profits, while in 2014 they had record losses), but the risk-return ratio seems bad at this moment given the proximity of the elections and several statements by some candidates in order to review the performance of state-owned companies”, he says.
For Guide, it is better to wait for the moment to improve to increase positions in state-owned companies.
That’s not what’s happening, though. Managers told Reuters that they are maintaining or increasing their positions at Petrobras on the eve of the elections, a move that indicates that part of the market is reconciling with the former president and presidential candidate. Luiz Inácio Lula da Silva (PT)which leads polls of voting intentions.
A partner at an asset in São Paulo interviewed by Reuters highlights that Petrobras shares are “very cheap” and, within a scenario in which Lula wins, he does not expect to see a setback.
“It is reasonable to expect some changes (if Lula wins). But a setback to what was the previous PT government is not expected. And even this setback is already more than priced into the stock price,” he says.
Is a stock worth a “buy”?
In a report published at the beginning of last week, the Credit Suisse raised the target price of Petrobras’ ADR (American Depositary Receipt) (PBR), from US$18 to US$20, and reiterated its “outperform” recommendation (expected performance above the market average, equivalent to “buy”).
The bank says that, with the elections approaching, volatility will continue to weigh on the state-owned company’s shares. Even so, experts remain positive with the oil company’s investment thesis, with the return proving to be greater than the risks.
According to Credit Suisse, after a series of price cuts in fuels In both the international and domestic markets, Petrobras is expected to generate US$8 billion of free cash flow each quarter and distribute all this money as dividends.
THE Great Investments also has a similar view, in the expectation that Petrobras will continue to pay good dividends in 2023. Even so, the brokerage has a “hold” recommendation for the share, with a target price of R$ 41.
O Santanderwhich recently changed its recommended stock portfolio top pickskept Petrobras as one of its favorite names to take advantage of the Brazilian stock market recovery.
Despite this, the bank is neutralizing its exposure to Petrobras and Bank of Brazil (BAAS3) due to the proximity of the elections. In the assessment of the analysis team, the electoral race should prove to be tight.
“As a result, we believe it is prudent to remain close to the market weight in these stocks, as we do not want to predict the winner”, he says.
With information from Reuters.
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Source: Moneytimes
I am a journalist with over 6 years of experience working in the news industry. I currently work as an author for Global Happenings, and my coverage focuses on Technology news. I have written for various publications, including Reuters, The New York Times and The Guardian.
