Petrobras: Undervalued But Risky

SM Investor
2.86K Followers

Summary

  • Due to the geopolitical tensions in Europe and sanctions on Russian oil imports, the demand for Brazilian oil is increasing.
  • I estimate PBR’s 2Q 2022 and 3Q 2022 foreign market sales to be higher than in 1Q 2022.
  • After Petrobras announced fuel prices increase, President Bolsonaro got angry and publicly reproached the company. To respond to the President’s anger over the fuel price hike, the CEO resigned.
  • According to financial results, the market outlook, and the comparative company analysis, Petrobras is a buy.
  • However, as the performance of the company is tied to political issues, PBR’s investors face huge risks.

Oil from Brazil.

Ranimiro Lotufo Neto/iStock via Getty Images

Petróleo Brasileiro S.A. - Petrobras (NYSE:PBR) is a state-owned Brazilian oil and gas company that benefited from the oil market condition in the last year. According to Seeking Alpha's quant rating, PBR is a strong

This article was written by

2.86K Followers
SM Investor focuses on medium to long-term investments, analyzing companies' financial metrics such as cash flow, growth, and valuation. As financial analysts with real market education and experience, we cover diversified portfolios including growth and value equities, and dividend stocks (including REITs and RICs). Our approach involves using diversified value investing strategies to identify profitable companies with strong financials and low risks at bargain prices.SM Investor collaborates with Morteza Moradi, who holds a Master's degree in Economics and has more than 10 years of experience writing data-driven analytical and investing content.

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 (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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