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Petrobras (PBR) Gains As Market Dips: What You Should Know

Zacks Equity Research
·3-min read

Petrobras (PBR) closed at $11.89 in the latest trading session, marking a +0.93% move from the prior day. This move outpaced the S&P 500's daily loss of 2.01%. Elsewhere, the Dow lost 1.56%, while the tech-heavy Nasdaq lost 0.12%.

Coming into today, shares of the oil and gas company had lost 17.39% in the past month. In that same time, the Oils-Energy sector lost 13.54%, while the S&P 500 lost 6.08%.

Petrobras will be looking to display strength as it nears its next earnings release. The company is expected to report EPS of $0.94, down 20.34% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $29.14 billion, up 38.89% from the prior-year quarter.

PBR's full-year Zacks Consensus Estimates are calling for earnings of $4.45 per share and revenue of $110.9 billion. These results would represent year-over-year changes of +86.97% and +32.08%, respectively.

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Any recent changes to analyst estimates for Petrobras should also be noted by investors. Recent revisions tend to reflect the latest near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. The Zacks Consensus EPS estimate remained stagnant within the past month. Petrobras is currently sporting a Zacks Rank of #1 (Strong Buy).

Digging into valuation, Petrobras currently has a Forward P/E ratio of 2.65. For comparison, its industry has an average Forward P/E of 3.32, which means Petrobras is trading at a discount to the group.

Meanwhile, PBR's PEG ratio is currently 1.08. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. PBR's industry had an average PEG ratio of 1.08 as of yesterday's close.

The Oil and Gas - Integrated - Emerging Markets industry is part of the Oils-Energy sector. This industry currently has a Zacks Industry Rank of 28, which puts it in the top 12% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.


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Petroleo Brasileiro S.A. Petrobras (PBR) : Free Stock Analysis Report
 
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