Analyst Caio Ribeiro from Bank of America Securities maintained a Buy rating on Petroleo Brasileiro SA- Petrobras (PBR – Research Report) and keeping the price target at $16.50.
Caio Ribeiro’s rating is based on a combination of factors that highlight both challenges and opportunities for Petroleo Brasileiro SA- Petrobras. Despite the lower-than-expected dividend announcement for the fourth quarter of 2024, which was primarily due to higher capital expenditures and lower EBITDA, Ribeiro maintains a positive outlook on the company’s future prospects. The decision to advance capital expenditures related to the Buzios field’s FPSOs suggests a proactive approach to mitigating risks of project delays, which could be beneficial in the long term.
Furthermore, while the higher capital expenditures have impacted the immediate dividend yield, the maintained capex guidance for 2025 and the potential for a 12% dividend yield assuming a $75/bbl oil price remain attractive to investors. Ribeiro acknowledges that the market may view Petrobras as a cash return story, but the strategic financial decisions and future guidance provide a basis for optimism. Overall, the combination of these factors underpins Ribeiro’s Buy rating for Petrobras, reflecting confidence in the company’s ability to navigate current challenges and capitalize on future opportunities.
According to TipRanks, Ribeiro is a 2-star analyst with an average return of -0.8% and a 45.10% success rate. Ribeiro covers the Basic Materials sector, focusing on stocks such as Vale SA, Southern Copper, and Suzano Papel e Celulose SA.
In another report released yesterday, Morgan Stanley also maintained a Buy rating on the stock with a $19.00 price target.