Petrobras shares jump on oil rally, but political risk promises volatility

In the wake of the recovery of oil in the international market, Petrobras shares are on a steady upward trajectory on the Stock Exchange.

In the 12-month window ended on Friday (25), the preferred shares of the state-owned oil company accumulated a rise of 80.4% on the B3, while the common shares rose by 95%.

The Ibovespa broad stock index rose around 0.8% in the same range.

For investment analysts, the increase in the price of the commodity, which gained new impetus with the invasion of Ukraine by Russia, with the price exceeding the mark of US$ 100 (R$ 515.63) a barrel, tends to continue favoring the results. of the company in the next quarterly balance sheets.

And, consequently, the pockets of investors. Along with the record annual profit of R$ 106.6 billion announced on Wednesday (23), Petrobras announced that it will pay R$ 37.3 billion in dividends for the fourth quarter, taking to R$ 101.4 billion the amount paid to shareholders for the 2021 result.

Market analyzes point out that the figures presented are largely due to the company’s strong cash generation, with the average price of the commodity around US$ 80 (R$ 412.50) in the last quarter of last year.

With the recent surge in raw material, analysts predict a positive impact on Petrobras’ results, with the state-owned company likely announcing new fuel readjustments — the last announcement in this regard took place on January 12th.

“We still see Petrobras’ bylaws protecting the company from subsidizing fuels as in the past, with the transfer of the international escalation in the price of Brent being a matter of time”, say XP analysts, in a report.

Petrobras said on Thursday (24) that it will wait for the evolution of the international scenario before deciding on new price transfers.

If escalating tensions between Russia and Ukraine persist for some time, market projections indicate that the commodity could experience even more stretched levels, putting additional pressure on the state-owned company.

Analysts at the American bank Goldman Sachs do not rule out the barrel of Brent oil testing the barrier of US$ 125 (R$ 644.53) in the coming months, depending on the evolution of the scenario in Ukraine.

“Uncertainty about potential sanctions [à Rússia] begins to create a potential supply shock. And until the uncertainties about the rapid escalation of conflicts in the region are resolved, the tendency is that the price of oil will continue to rise”, say the experts.

In addition to the sector’s own dynamics, the restructuring that Petrobras has undergone in recent years, with the sale of non-essential assets and a greater focus on the pre-salt layer, has made the operation much more efficient and profitable than it was in past administrations, he says. Lucas Ribeiro, equity analyst at Kínitro Capital.

“The changes were very drastic, with a strong reduction in indebtedness”, says Ribeiro, who says that Petrobras is an important bet on Kínitro’s funds.

A partner at the manager Finacap Investimentos, Alexandre Brito adds that the search for new renewable energy sources and the reduction in financing to increase oil production, combined with a demand that remains heated, already has and should continue to contribute to sustaining prices. highs of oil on a global scale.

“We continue with a very constructive vision for Petrobras in the medium and long term”, says Brito, who counts on having in the company the main position of Finacap’s equity funds, representing between 10% and 15% of the total in the portfolios.

Founding partner of the analyst firm Nord Research, Bruce Barbosa recognizes that, compared to the main international peers, Petrobras trades under multiples that can be considered quite cheap.

However, this discount imposed by investors, points out the expert, is due precisely to the fact that the state-owned company is subject to the risk of being used for political and electoral purposes.

“I think there is a great risk that the government will use Petrobras to finance a reduction in the price of oil”, says Barbosa, who mentions the PEC on Fuels in Congress.

Because of this, he says he prefers the shares of privately held oil company PetroRio within the oil and gas sector on the Brazilian stock exchange.

“Even because it is much smaller, with around 1% of the production volume in relation to Petrobras, PetroRio has a much greater growth potential”, he says.

“We continue to have a positive view of Petrobras, given its new level of profitability, which leads us to project a return via dividends [dividend yields] between 15% and 25% [sobre o valor de mercado] per year for the company”, say UBS BB analysts.

However, they also say that an eventual change in the controlling shareholder may limit the expectation of profit in the medium and long term, “since the company’s direction may change from an efficient capital allocation to a strategy more dedicated to the country’s development”. .

“Petrobras is a company that trades under highly discounted multiples compared to its peers on the stock exchange, which is generating a lot of cash flow and with the payment of extraordinary dividends. a state-owned company”, says Renan Vieira, partner and investment director at Taruá Capital.

Even if the price of oil goes through some adjustment and returns to levels around US$ 80, even so, the expert’s assessment is that the investment in the company remains a good deal, given the current operational moment in which the company is find.

In any case, the manager recognizes that the price gap with the international market, which he currently calculates is close to 15%, generates some discomfort about the state-owned company’s policy among investors.

“Petrobras shares should have a lot of volatility throughout the year, but with a discounted valuation and paying high dividends that draw the investor’s attention and attract purchase”, says Vieira.