Petrobras (PETR4): 4 points explain the 22% jump in shares

Petrobras common and preferred shares are up 18% and 22% for the year (Image: Bloomberg)

The shares of Petrobras have another bullish day on the Stock Exchange. The ordinary shares of the state-owned company, PETR3jumped 0.91%, to R$ 29.82, while the preferred ones, PETR4, rose 0.98%, to R$ 26.71, at 11:30 am this Friday (26). In the year, assets accumulate increases of 18.5% and 22.5%, respectively.

According to analysts, the optimism with stocks in recent weeks is due to four factors:

  • disclosure of the new pricing policy for fuels;
  • positive result in the first quarter of 2023 (1Q23);
  • announcement of dividends in the amount of R$1.89 per share; It is
  • local mood improvement.

On May 16, Petrobras announced a new fuel price policy, which put an end to subordination to the import par price.

The analyst of Empiricus ResearchRuy Hungary, says that, despite being “a little gray”, the measure excluded a scenario of selling below cost price, which would imply “big losses”.

Júlio Borba, analyst at Benndorfalso points out that the policy removed a greater perception of risk from the market in relation to the new management of the state-owned company.

He also points out that the performance of the shares is linked to Petrobras’ profit of BRL 38 billion in 1Q23, disclosed at the beginning of the month. In addition to the second highest profit in history for a first quarter, the drop in lifting cost and dividends of R$ 24.6 billion were the highlight of the balance sheet.

In addition, analysts associate Petrobras’ highs with the optimism of the local market. B3’s main reference index, the Ibovespa (IBOV) high sum of 5% in the accumulated of the month.

Will you go higher?

The Empiricus analyst claims that Petrobras shares already embody “quite great pessimism”, trading at less than 3 times earnings. “All it takes is for the new dividend policy and the new investments not to be too displeasing for shareholders to continue profiting from the thesis”, he says.

The state-owned company has the potential to provide returns to its shareholders via capital gains or through dividends, according to Hungary.

Borba, from Benndorf, also points out that keeping fuel prices close to market prices and a good diligence of investments are also great drivers of value to the thesis.

On the other hand, the risks for the company stem from possible political interference that harm the results, evaluate the analysts.

They highlight possible uncontrolled investments with no prospect of good returns, significant interference in fuel prices and the payment of only mandatory minimum dividends.

Is it worth taking a position in Petrobras?

Empiricus has a Buy recommendation on the shares of Petrobrasbut focusing on dividends.

“Even considering a worsening in capital allocation and dividend policy, the company should still deliver good yields for the shareholders”, says Hungary.

Benndorf, on the other hand, downgraded the state-owned company’s assets to “neutral”, with a target price of R$32. attractive in the medium term.

“We prefer to wait for the next movements of the new management to define whether we have a more optimistic bias with the marry“, says Borba.

Source: Moneytimes

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