Change of president does not affect Petrobras prices, say analysts

The first reactions on the stock exchanges to the new change in charge of Petrobras were quite negative, but Brazilian analysts and managers are still betting that the state-owned company is protected against interference in its pricing policy, which has been criticized by the Jair Bolsonaro government.

The dismissal of José Mauro Coelho with only 40 days in office raised new criticisms regarding possible interference in the management of the company and, in the government, the expectation is that some type of lock will be created to secure transfers.

In the pre-market of the New York Stock Exchange this Tuesday (24), Petrobras shares fell by close to 12%, with the fear of foreign investors about interference in the price policy. On the São Paulo stock exchange, the company also started trading down.

For analysts at UBS BB and Goldman Sachs, however, the short term of office of his replacement, Caio Paes de Andrade, and the risks of liability for eventual changes that harm the state-owned company may contain the impetus for interference.

“We do not expect changes in Petrobras’ pricing policy or strategy,” wrote UBS BB analysts Luiz Carvalho, Matheus Enfeldt and Tasso Vasconcellos, who see the switch as a government signal to express concern about rising prices.

“In the short term, the Petrobras statute and Brazilian law reduce the possibility of interventions”, add Goldman Sachs analysts Bruno Amorim, João Frizo and Guilherme Costa Martins.

The two banks maintain a recommendation to buy the company’s shares, based on the expectation of high dividend distribution. Returning BRL 101 billion to its shareholders for its 2021 performance, Petrobras entered the list of companies known by the market as “dairy cows”.

Waldir Morgado, partner Nexgen Capital, also maintains the recommendation, believing in the payment of rich dividends in the year. And he points out that the government has already promoted three changes in the command of the state-owned company without any change in the policy of parity with international quotations.

He believes that fuel prices will continue to follow the international market, but they may have more spaced readjustments, a strategy that had already been informally adopted by Paes de Andrade’s last two predecessors.

Gasoline, for example, has not been readjusted for 74 days and today has an average lag of R$ 0.10 per liter in relation to the import parity price. The difference was once greater, but retreated with the appreciation of the real against the dollar in recent days.

Morgado, on the other hand, pointed out that the appointment of a name close to the ministers of the Economy, Paulo Guedes, and of Mines and Energy, Adolfo Sachsida, could accelerate the studies for the privatization of the state-owned company, which he sees as positive.

VanDyck Silveira, CEO of Trevisan Escola de Negócios, says that the frequency with which the government changes Petrobras’ command already has an impact on the company’s management. The results will be even worse, he says, if the government manages to “pull down” the price of fuel.

“We are reaching the fourth replacement in a little more than three years of government. This is something unspeakable, inexplicable and unacceptable for a company the size of Petrobras”, he says. “The largest company in the country is at the mercy of a controller who wants to do electoral politics.”