Opinions John Stephenson
Petroleo Bras Sa PetroPBRPAST TOP PICKAug 30, 2016
Stock price when the opinion was issued
As of Jun 05, 2026. Market Open.
You might be interested:
;fill-opacity:1;'/%3e%3cpath%20d='M31%2018.6001V30H8V18.6001L14.1334%2022.4334L19.4999%2014L24.8669%2022.4334L31%2018.6001Z'%20fill='%23EE5432'%20style='fill:%23EE5432;fill:color(display-p3%200.9340%200.3310%200.1956);fill-opacity:1;'/%3e%3c/svg%3e){kind=small}
Premium contentOur PAST TOP PICK with PBR has triggered its stop at $13.50. To remain disciplined, we recommend covering the position at this time. This will result in a net investment loss of 3%, when combined with our previous guidance.
Premium contentPremium contentWe reiterate PBR, Brazil's national energy producer as a TOP PICK. Quarterly cash flows reveal that the company is once again building reserves, while continuing to pay down debt. It trades at 5x earnings, 1.2x book and supports a 22% ROE. The dividend yield is supported by a payout ratio of 55% of cash flows. We continue to recommend a stop at $12, looking to achieve $17 -- upside potential of 23%. Yield 7.4%
(Analysts’ price target is $16.96)Premium contentPetrobras (PBR) is the national energy company of Brazil. The company released its strategic plan to 2050 and it emphasizes a renewed growth in capital projects along with a large distribution to share holders ($55 bn by 2029). It trades at 6x earnings, 1.2x book and supports a 29% ROE. We like that cash reserves are growing. The healthy dividend is backed by a payout ratio under 60% of cash flow. We recommend setting a stop-loss at $12, looking to achieve $18 -- upside potential over 25%. Yield 6.5%
(Analysts’ price target is $18.24)
Premium content
Premium content
(A Top Pick Sept 26/15. Down 130.15%.) He closed this off about a month after he had recommended it, because oil started to ramp up. The company had an extremely high debt load and oil prices looked under pressure. Also, there was a corruption scandal going on. The company has slashed their CapX to the bone and were able to keep their free cash flow on side. The story has improved materially.