Shares of Petroleo Brasileiro or Petrobras, rose in early trading on Wednesday, maintaining their uptrend so far this year.
Despite the recent rally of around 50% gains, the current valuation of the company’s stock remains attractive, according to Goldman Sachs.
Bruno Amorim upgraded the rating for Petrobras to Buy, while maintaining a price target of $18.10.
Prior risks have diminished, after the new government provided some clarifications on the policies to be adopted, Amorim said in the upgrade note.
The analyst cited the easing of these 3 tail risks as the reason for the upgrade:
Management believes “25% payout on earnings is too low” and mentioned buybacks as an option.
“The new pricing policy is not straightforward but points to PBR still following international price trends (even if with a delay and/or a small discount vs international prices),” Amorim wrote.
“Low carbon initiatives capex is guided to move from 6% of total capex to up to 15% thus limiting the amount to be disclosed in November together with the new strategic plan,” he added.
Shares of Petrobras had risen by 2.70% to $14.62 at the time of publishing Wednesday.
© 2023 Zenger News.com. Zenger News does not provide investment advice. All rights reserved.
Produced in association with Benzinga
