© Reuters. Brazilian oil giant Petrobras (PBR) raised at Goldman on attractive valuation
Goldman Sachs analysts upgraded shares of Petrobras (NYSE:) to Buy, despite the 50%+ (dividend-adjusted) year-to-date rally.
The analysts still see an attractive valuation given that the company offers ~15% FCF yield in 2024-25E, compared to mid-high single digits for global majors.
Moreover, they highlighted “diminished tail risks after some clarifications on the policies to be adopted by the new government.”
“The new dividend policy is expected to be announced by the end of July, but in the meantime management has already mentioned it believes 25% payout on earnings is too low and also mentioned buybacks are an option,” they wrote in a note.
PBR shares are up almost 1% in pre-open Wednesday.
Goldman has an $18.10 price target on PBR shares, which offers an upside potential of about 27%.
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