Petrobras: The Sell-Off Provides Opportunity
Summary
- In recent weeks, Petrobras's momentum has weakened, and at the moment, it's trading 14% off-high after a wave of analyst downgrades followed dividend frustration.
- PBR delivered strong financial performance last year with the second-highest EBITDA ($52.4 billion), operational cash flow ($43.2 billion), and net profit ($24.9 billion) in history.
- The market is expecting a further correction in the company's financials, but this may be already reflected in its forwarding valuation multiples.
- Despite risks, I think Petrobras is still undervalued and presents a buying opportunity with double-digit percentage upside potential.
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Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, but may initiate a beneficial Long position through a purchase of the stock, or the purchase of call options or similar derivatives in PBR, PBR.A over 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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