- Investors sent Petrobras (NYSE:PBR) more than 5% higher in today's trade following the release of audited financial statements, but analysts generally are less willing to look past the company's fundamental problems.
- Credit Suisse says that while PBR's writedowns are "big enough to instill some credibility... capex of $29B-$25B in 2015-16 is not low enough face a 2015 cash generation of $23B... 2016 production growth guidance of 3% is low and will disappoint rating agencies... leaves with the impression that PBR will continue to be more of the same... a dangerous place to be."
- Deutsche Bank agrees, saying "While lower capex is positive, the savings won’t be sufficient to start deleveraging in 2016, particularly in light of reduced growth plans; hence we expect liquidity will tighten further."
- HSBC notes a long period of forecast negative free cash flow, the current high balance sheet leverage at 4.6x estimated 2015 net debt/EBITDA, and a lack of visibility on the options for delivering higher cash generation.
- Yet some on Wall Street tell Business Insider that the auditors did a good job pricing in the damage, the worst is behind for PBR, and now the lows are in.