December 19, 2024
Top 10 Stock Petrobras Strong Buy Recommendation
How to read the ranks
For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".
Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".
Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.
Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.
(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).
(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.
Snapshot: Petrobras – Top 10 Stock in Water Efficiency Leaders
Petrobras is listed as a top 10 stock on December 19, 2024 in the market index Water Efficiency because of its high performance in at least one of the Obermatt investment strategies. As three out of four consolidated Obermatt Ranks exhibit excellent performance, it is a solid investment where the risk of paying too much for the shares is low. Based on the Obermatt 360° View of 86 (top 86% performer), Obermatt assesses an overall strong buy recommendation for Petrobras on December 19, 2024.
Snapshot: Obermatt Ranks
| Country | Brazil |
| Industry | Oil & Gas Integrated |
| Index | BOVESPA, BOVESPA, Low Emissions, Energy Efficient, Good Governace Growth Markets, Human Rights, Water Efficiency |
| Size class | XX-Large |
When Obermatt identifies the Top 10 stocks in a market, it’s based on a certain investment strategy. The best performing stocks usually aren’t the ones that everyone is talking about (those are often "over-priced" and have low Value ranks).
For each investment strategy, we provide you with more detailed analysis and our recommendation. You see the ranks of the top 10 stocks ranked by that particular investment strategy (360° View, Sentiment, Value, Growth, Safety and Combined Financial Performance).
360° View: Obermatt 360° View Petrobras Strong Buy
| 360 METRICS | December 19, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 83 |
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| GROWTH | ||||||||
| GROWTH | 71 |
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| SAFETY | ||||||||
| SAFETY | 22 |
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| SENTIMENT | ||||||||
| SENTIMENT | 87 |
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| 360° VIEW | ||||||||
| 360° VIEW | 86 |
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ANALYSIS: With an Obermatt 360° View of 86 (better than 86% compared with alternatives) for 2024, overall professional sentiment and financial characteristics for the stock Petrobras are very positive. The 360° View is based on consolidating four consolidated indicators, with all but one indicator above average for Petrobras. The consolidated Value Rank has an attractive rank of 83, which means that the share price of Petrobras is on the lower side compared with the typical size in indicators such as revenues, profits, and invested capital. This means the stock price is lower than for 83% of alternative stocks in the same industry. The consolidated Growth Rank has a good rank of 71, which means that the company experiences above-average growth momentum when looking at financial metrics such as revenue, profit, and invested capital growth, as well as stock returns. In addition, professional market sentiment is above average compared with other stock investment alternatives with a Sentiment Rank of 87. But the company’s financing is risky with a Safety rank of 22. This means 78% of comparable companies have a safer financing structure than Petrobras. ...read more
RECOMMENDATION: With a consolidated 360° View of 86, Petrobras is better positioned than 86% of all alternative stock investment opportunities based on the Obermatt Method. As three out of four consolidated Obermatt Ranks exhibit excellent performance, such as good value (Value Rank of 83), above-average growth (Growth Rank of 71), and positive market sentiment in the professional investor community (Sentiment Rank of 87), it is a solid stock investment where the risk of paying too much for the shares is limited, and disappointments are less likely, unless information not publicly available. Only the company financing structure is on the riskier side (Safety Rank of 22), but that would also mean better returns for shareholders if things work out well. Good value is sometimes an indication that the company's future is challenging. If they have been growing above average and are still a good value, it may indicate that this will not continue. We recommend evaluating whether the future of Petrobras is as difficult as the low price of the stock, despite good growth and positive professional investor sentiment, suggests. Since the professional community is optimistic, you might have less to worry about, and the stock is just not sufficiently visible right now, which may indicate good timing. ...read more
Sentiment Strategy: Professional Market Sentiment for Petrobras very positive
ANALYSIS: With an Obermatt Sentiment Rank of 87 (better than 87% compared with alternatives) for 2024, overall professional sentiment and engagement for the stock Petrobras is very positive. The Sentiment Rank is based on consolidating four sentiment indicators, with all but one indicator above average for Petrobras. Analyst Opinions are at a rank of 74 (better than 74% of alternative investments), which means that, currently, stock research analysts tend to recommend a stock investment in the company. In addition, Analyst Opinions Change has a rank of 70, which means that stock research experts are changing their opinions for the better in recommending investing in the company. In other words, they are getting even more optimistic about investments in Petrobras. Finally, the Professional Investors rank is 81, which means that currently, professional investors hold more stock in this company than in 81% of alternative investment opportunities. ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 87 (more positive than 87% compared with investment alternatives), Petrobras has a reputation among professional investors that is significantly higher than that of its competitors. Pros tend to favor investing in this company. But there is also a signal for caution. Market Pulse has a rank of 32, which means that the current professional news and professional social networks tend to be negative when discussing this company (more negative news than for 68% of competitors). This could mean future risks and should make investors careful. Attention to negative news for Petrobras is worthwhile because they may be early warning signals. Without those, all other professional signals are encouraging, especially since analysts are getting more optimistic. ...read more
Value Strategy: Petrobras Stock Price Value at the top
ANALYSIS: With an Obermatt Value Rank of 83 (better than 83% compared with alternatives) for 2024, Petrobras shares are significantly less expensive than comparable stocks. The Value Rank is based on consolidating four value indicators that are all above average for Petrobras. Price-to-Sales is 55 which means that the stock price compared with what market professionals expect for future sales is lower than for 55% of comparable companies, indicating a good value for Petrobras's revenue size. The same is valid for expected Price-to-Profits, more favorable than for 97% of alternatives, and this is also true for the Price-to-Book capital ratio (also referred to as market-to-book ratio) with a Price-to-Capital Rank of 78. Compared with other companies in the same industry, dividend yields of Petrobras are expected to be higher than for 100% of all competitors (a Dividend Yield rank of 100). ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 83, is a buy recommendation based on Petrobras's stock price compared with the company's operational size and dividend yields. Since all value metrics are above the industry average, there is no objection to investing in Petrobras based on its detailed value metrics.
Growth Strategy: Petrobras Growth Momentum good
| GROWTH METRICS | December 19, 2024 | |||||||
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| REVENUE GROWTH | ||||||||
| REVENUE GROWTH | 31 |
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| PROFIT GROWTH | ||||||||
| PROFIT GROWTH | 22 |
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| CAPITAL GROWTH | ||||||||
| CAPITAL GROWTH | 85 |
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| STOCK RETURNS | ||||||||
| STOCK RETURNS | 67 |
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| CONSOLIDATED RANK: GROWTH | ||||||||
| CONSOLIDATED RANK: GROWTH | 71 |
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ANALYSIS: With an Obermatt Growth Rank of 71 (better than 71% compared with alternatives), Petrobras shows an above-average growth dynamic in its industry. Investors also speak of positive momentum. The Growth Rank is based on consolidating four value indicators, with half of the indicators below and half above average for Petrobras. Capital Growth has a rank of 85, which means that currently professionals expect the company to grow its invested capital more than 22% of its competitors. Investors welcomed this, visible in the Stock Returns rank of 67 (above 67% of alternative investments). But Sales Growth has only a rank of 31, which means that, currently, professionals expect the company to grow less than 69% of its competitors, and Profit Growth is also low at a rank of 22. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 71, is a buy recommendation for growth and momentum investors. This is an ambiguous picture. Revenue growth and capital growth are strong, but the growth in profit, which seems good, can also be an indication that growth momentum may be negative. The fact that stock returns have been above average doesn't help much, as stock returns are less reliable in showing a company’s future growth potential. Prices may perform well for the simple reason that investors were too pessimistic in the past and are now correcting their opinions and moving the stock price to a more reasonable level. As the growth picture is mixed for Petrobras, investors may want to look at value and sentiment indicators for a well-rounded picture of this stock. ...read more
Safety Strategy: Petrobras Debt Financing Safety risky
| SAFETY METRICS | December 19, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 32 |
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| REFINANCING | ||||||||
| REFINANCING | 11 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 70 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 22 |
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ANALYSIS: With an Obermatt Safety Rank of 22 (better than 22% compared with alternatives), the company Petrobras has much riskier financing practices than comparable other companies, which means that their overall debt burden is significantly above the industry average. This doesn't mean that the business of Petrobras is also risky, it only means that the company is on the riskier side in respect to bankruptcy in case things turn sour, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with just one indicator above average for Petrobras. Liquidity is at 70, meaning the company generates more profit to service its debt than 70% of its competitors. This indicates that the company is safer when it comes to debt service. But Refinancing is riskier at a rank of 11, which means that the portion of the debt that is about to be refinanced is above average. It has more debt in the refinancing stage than 89% of its competitors. Leverage is also high at a rank of 32, which means that the company has an above-average debt-to-equity ratio. It has more debt than 68% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 22 (worse than 78% compared with alternatives), Petrobras has a financing structure that is significantly riskier than that of its competitors. High Leverage (a low Obermatt Leverage Rank) is good in good times, because it usually indicates that shareholders get higher returns. The good Liquidity performance of the company is an indicator that this is the case. However, if you expect an economic downturn, you may stay clear of this stock because they have an above-average debt level that needs refinancing soon. ...read more
Combined financial peformance: Petrobras Above-Average Financial Performance
| COMBINED PERFORMANCE | December 19, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 83 |
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| GROWTH | ||||||||
| GROWTH | 71 |
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| SAFETY | ||||||||
| SAFETY | 70 |
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| COMBINED | ||||||||
| COMBINED | 68 |
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ANALYSIS: With an Obermatt Combined Rank of 68 (better than 68% compared with investment alternatives), Petrobras (Oil & Gas Integrated, Brazil) shares have above-average financial characteristics compared with similar stocks. Shares of Petrobras are a good value (attractively priced) with a consolidated Value Rank of 83 (better than 83% of alternatives), show above-average growth (Growth Rank of 71) but are riskily financed (Safety Rank of 22), which means above-average debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 68, is a buy recommendation based on Petrobras's financial characteristics. As the company Petrobras's key financial metrics exhibit excellent performance in two areas, such as good value (Obermatt Value Rank of 83) and above-average growth (Obermatt Growth Rank of 71), it could be argued that the risk-taking in financing (Obermatt Safety Rank of only 22) indicates that the company is optimistic about the future and sees debt as an opportunity to boost returns. More debt means more shareholder returns if everything goes well. However, higher debt burdens are risky when interest rates rise or the business deteriorates in a crisis. If you believe the company's future is market-typical or even better, this could be an argument for a share purchase. ...read more
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