JP Morgan’s take on $PBR 💎🙌🏽

Submitted by Wide-Comparison4318 t3_yf3hsv in wallstreetbets

Still, the upside potential is meaningful. Even if a Lula government would force Petrobras to take shareholder-unfriendly actions, the stock could still gain more than 50% based on a 4% discount rate and $80 Brent crude. “We believe that, despite the political noise that has been weighing on the stock, Petrobras still provides decent cash flows…and attractive upside even in a more interventionist scenario,” Angele writes. Right now, the stock looks too cheap to pass up.

The likely incoming president, Lula, has said the following on Petrobras this year “Petrobras has to be profitable, it has to earn, it has to distribute dividends to the shareholders.”

💎 🙌🏽

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VisualMod t1_iu1h5k6 wrote

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VisualMod t1_iu1h6ir wrote

>I agree that Petrobras looks like a good investment at this point. The company is still generating decent cash flows, and there is significant upside potential even if the new government intervenes more than investors would like. Lula himself has said that he wants Petrobras to be profitable and distribute dividends, so it seems likely that the company will continue to perform well under his leadership.

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frcdfed2004 t1_iu1jj1i wrote

Still have a shit ton of debt that ive always been concerned with, but looks like itll pay down if oil stays up. Thats my bet at least with them and chevron. Just hoping pbr can get their gas assets working more economically then they are doing now and generate some more profit while the prices are at peak levels.

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Wide-Comparison4318 OP t1_iu1mdhu wrote

They have paid down a lot of debt. Their financials are strong. Their debt/equity ratio is .56 Their current ratio is 1.31. They carry a book value of $11.96. They have had a lot of unusual Option activity. At the end of the day, they cash flow and if Brent keeps climbing, they will rake in the cash 💰

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frcdfed2004 t1_iu1pkm6 wrote

Yeah they paid down like 12 billion in 21, im sure there will be another chunk paid off this year. Exports are down though as they have competition for fuel oil with private equity buying a refinery in the north. Again, as long as oil and gas holds at current levels they should be golden for a bit.

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