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Petrobras' Doomsday Valuation Misses Persisting Oil Demand

David Trainer profile picture
David Trainer


  • Despite the world’s persistent reliance on fossil fuels, much of the energy industry is foregoing the capital investments needed to meet future energy demand.
  • This state-controlled operator is unabashedly prepared to grow its crude oil production while others divest.
  • Petrobras' cheap valuation assumes fossil fuel demand goes to zero and more than offsets geopolitical risks.
  • Looking for more investing ideas like this one? Get them exclusively at Value Investing 2.0 . Learn More »

Front view of Petrobras Petroleo Brasileiro S.A. Company Main Office in Rio de Janeiro, Brazil

caio acquesta/iStock Editorial via Getty Images

Author's Note on 1/7/2022

We updated Petrobras’ (PBR: $11/share) market cap and the future cash flow expectations implied by its valuation after we corrected the TTM shares outstanding value used in our model.

Our thesis remains unchanged. Petrobras’ valuation implies NOPAT will

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This article was written by

David Trainer profile picture
We aim to help investor make more intelligent capital allocation decisions. Our research is driven by proven-superior fundamental data, models and equity/credit ratings.

Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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