A Petrobras (PETR4) must pay 50% of the net profit in dividendsat BRL 3.62 per share for 2023 (12.1% yield) and BRL 4.02 per share for 2024 (13.4% yield), BB Investimentos said this Friday (2).
“We understand this volume of dividends as adequate to face the increase in investments and considering the high generation of operating cash”, said the bank in a report signed by Daniel Cobucci.
For the analyst, the proposed adjustment to Petrobras’ Strategic Planning should include an improvement in the Shareholders’ Remuneration Policy, including the possibility of buying back shares.
“The share buyback can be an interesting way to increase shareholder compensation, in line with the practices of global companies in the sector,” he said.
If Petrobras chooses to pay the legal minimum of 25% in dividends, the projection would be reduced to a dividend yield of 6.05% in 2023 and 6.7% in 2024, said BB Investimentos.
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New target price for Petrobras
BB Investimentos reduced the Target Price from Petrobras in 2023 at BRL 36 (before BRL 43), maintaining the buy recommendation.
The bank stated that it expects that operating conditions, with ramp up of new platforms and low extraction costs, combined with good financial conditions (low leverage and strong cash generation), continue to support the company’s good performance.
“Petrobras has short-term challenges, such as reviewing its strategic plan and the expectation of changes in the dividend policy, and other long-term ones, such as the replacement of reserves (including the possible exploration of the equatorial margin that has gained evidence in recent weeks) and investments in energy transition”, he pondered.
The company issued a statement on Thursday (1) pointing out some of the fundamentals that should be part of the next strategic plan (2024/2028), with the main change being the change in the percentage of investments in low carbon capex, going from 6% in the current plan to a range between 6% and 15%.
“Given that the amount in question should include renewable energies, but also deals with the decarbonization of oil and refining, we understand the announcement as positive, in that it makes clear the maximum size that investments in renewables can reach, using only generation of cash, without increasing the level of indebtedness”, he said.
Source: Moneytimes
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