Petrobras: Solid Fundamentals In A Turbulent Political Environment

Summary

• Petrobras is executing a $111B plan through 2029, focused on offshore pre-salt expansion, industrial growth, and energy transition, while maintaining strong margins and efficient capital allocation.
• Despite solid profitability and rising production, Petrobras trades at deep discounts: P/E FWD of 4.24x and EV/EBITDA of 3.01x, over 50% below industry averages.
• Q1 2025 results show resilience: $6B net income (+25% YoY), $10.7B EBITDA, and 2.77MM boed production, led by new FPSOs and discoveries in Brazil and Colombia.
• Risks include oil prices, FX volatility, and Brazilian politics, but the value gap is too wide to ignore—Petrobras offers long-term upside with short-term noise.

Joa_Souza

Investment Thesis

Petrobras (NYSE:PBR) is carrying out an ambitious strategy of growth and efficiency. Its new business plan allocates $111 B until 2029, with a focus on offshore production, for industrial expansion and energy transition.

Pre-salt production set

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.