Seeking Alpha

Wait and see on Petrobras, Barclays believes

  • Petrobras (PBR +0.9%) shares look attractive using net asset value analysis, but investors should take a wait-and-see approach since the stock is unlikely to outperform in the next year, Barclays believes.
  • While management has made solid progress in terms of efficiency, production has not yet begun to show Y/Y improvement; given PBR’s track record of underperforming production guidance, the firm doesn’t think investors will give the shares credit until reported results confirm management’s guidance.
  • Rather than PBR, Barclays suggests Suncor Energy (SU), ConocoPhilips (COP) and Husky Energy (HUSKF.PK) for better risk/reward potentials. (also)
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Comments (2)
  • petroglyph
    , contributor
    Comments (36) | Send Message
     
    No one doubts that PBR has assets.

     

    What many of us doubt is the advisability of being junior partners with a government that has shown more interest in using petrobras to subsidize fuel costs and create Brazilian jobs than in anything resembling looking out for shareholders' interests.

     

    A lot of us did well with PBR under Lula, as he resisted the urge to kill the golden goose. There's nobody, other than shorts, who've done well under Dilma.
    14 Aug 2013, 04:36 PM Reply Like
  • Caiman Valores
    , contributor
    Comments (1537) | Send Message
     
    petroglypgh I couldn't agree more, while the company is undervalued is essentially a long-term leveraged play on the value of its assets and the political risk certainly raises concerns.
    15 Aug 2013, 01:14 AM Reply Like
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