Is Petróleo Brasileiro (PBR) Valuation Reflected by Analysts?

Petróleo Brasileiro may be undervalued with strong growth indicators, but the 11 analysts following the company give it an rating of hold. Their target prices range from $14.5 to $19.2 per share, for an average of $17.52. At today's price of $13.59, Petróleo Brasileiro is trading -22.43% away from its average target price, suggesting there is an analyst consensus of strong upside potential for the stock.

Petróleo Brasileiro S.A. - Petrobras explores, produces, and sells oil and gas in Brazil and internationally. Based in Rio de Janeiro, Brazil, the Large-Cap Energy company has 46,730 full time employees. Petróleo Brasileiro has offered a 39.2% dividend yield over the last 12 months.

Petróleo Brasileiro has a trailing twelve month P/E ratio of 4.0, compared to an average of 14.36 for the Energy sector. Considering its EPS guidance of $3.26, the company has a forward P/E ratio of 4.2.

Furthermore, the market is potentially undervaluing Petróleo Brasileiro in terms of its book value because its P/B ratio is 0.43. In comparison, the sector average P/B ratio is 2.1. The company's shares are currently -36.4% above their Graham number, which suggests that they are not trading at a fair value in terms of earnings and net assets.

2018 2019 2020 2021 2022 2023
Revenue (M) $84,638 $76,589 $53,683 $83,966 $124,474 $102,409
Gross Margins 38% 40% 46% 49% 52% 53%
Net Margins 9% 14% 2% 24% 30% 24%
Net Income (M) $7,414 $10,363 $948 $19,986 $36,755 $24,995
Diluted Shares (M) 7,442 7,442 7,442 7,442 7,442 7,442
Earnings Per Share $1.0 $1.39 $0.13 $1.52 $2.81 $1.91
Free Cash Flow (M) $382 $15,664 $15,656 $19,724 $24,913 $23,223
Total Debt (M) $80,508 $58,791 $49,702 $32,059 $26,378 $24,479
Net Debt / EBITDA 2.31 1.45 1.77 0.44 0.26 0.23
Current Ratio 1.48 0.97 1.04 1.25 1.0 0.96
The above analysis is intended for educational purposes only and was performed on the basis of publicly available data. It is not to be construed as a recommendation to buy or sell any security. Any buy, sell, or other recommendations mentioned in the article are direct quotations of consensus recommendations from the analysts covering the stock, and do not represent the opinions of Market Inference or its writers. Past performance, accounting data, and inferences about market position and corporate valuation are not reliable indicators of future price movements. Market Inference does not provide financial advice. Investors should conduct their own review and analysis of any company of interest before making an investment decision.