PBR fell more than 4% as production fell 5.5% Q/Q, driven mainly by outages due to the completion of platform upgrades as well as the sale of stakes in the Lapa and Roncador offshore projects, according to Solange Guedes, the company's head of E&P.
PBR’s "true potential" was not on display in the Q3, as "the current trend of lower production should reverse” when new units are connected in the deepwater Santos Basin, says Brazil's XP Investimentos, reiterating its Buy rating for the stock.
Bradesco BBI analysts also reiterate their Outperform rating, saying 2019 will be a "fundamentally very solid year" for PBR, with production growing at ~10%.
A continued decline in leverage amid solid results and the resumption of PBR's divestment program should support the stock’s performance, says Banco Santander, adding that the company should end 2018 with net debt-to-earnings near 2.2x, below its internal target of 2.5x.
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