Braskem has seen domestic demand for polyolefins and vinyls drop on a widespread slowdown in industrial production.
Global polyolefin/naptha spreads are healthy, but there is supply uncertainty during negotiations with Petrobras and an ethane-fueled plant in Mexico is still years away from making a real contribution.
Braskem's shares deserve to trade at a discount to European and U.S. basic chemical peers, but even a 6x multiple to 12-month EBITDA suggests solid upside.
Brazil-based Braskem (BAK -6.4%) is downgraded to Neutral at Credit Suisse, which says the market may look at BAK differently because of a setback in basic petrochemicals, which make up ~25% of sales. Prices and spreads have dropped 15%-48% Q/Q for many products, which could derail the healthy trends seen in the resin business, CS says.
Braskem (BAK), the largest petrochemical firm in Latin America, is reportedly set to buy Sunoco's (SUN) petrochemical assets for $400M, with an announcement possible as soon as Monday. Sources say Braskem is in talks with other U.S. firms as well and more acquisitions will likely follow.
Brazilian petrochemical giant Braskem (BAK -2%) agreed on a $477M purchase of Quattor Petroquimica - combining to pass Dow Chemical (DOW) as the biggest manufacturer of plastic resins in the West. With asset values down in the crisis, Braskem has said it's set out to buy rivals saddled with debt.