Brazil’s Petrobras Upgraded to Buy by Bradesco BBI, Which Sees a 25% Return by 2027
BRAZIL · BUSINESS Key Facts —What happened: Bradesco BBI upgraded state oil company Petrobras to buy after the shares’ recent fall made them cheap again. —The number: The bank kept its target at R$53 (US$10.26) per share for end-2027, implying a 25% total return with dividends. —The real story: Production at the state firm is […] The post Brazil’s Petrobras Upgraded to Buy by Bradesco BBI, Which…
Bradesco BBI, the investment-banking division of Brazil's largest bank, has upgraded Petrobras from a neutral rating to a buy recommendation. This move comes after the shares experienced a recent decline, making them more attractive to investors. The bank maintains its target price of R$53 (US$10.26) per share for the end of 2027, which implies a potential return of 25% including dividends.
The key driver behind this upgrade is Petrobras' production growth, which is estimated at 10.9% between 2025 and 2026, significantly outpacing global oil majors' expected growth of 2.2%. The bank projects total oil production at 2.82 million barrels per day for 2027. Additionally, Petrobras boasts a higher return on invested capital at 13.7% compared to the industry average of 6.6%.
The stock is currently trading at a 58% discount to global peers on projected 2027 earnings and offers a dividend yield of 9.4%, surpassing the 7.4% yield of integrated global oil companies. The primary risks to this valuation include a further decline in oil prices and potential capital allocation decisions, such as aid to Petrobras' troubled petrochemical subsidiary, Braskem.
Written by urgent.news from The Rio Times's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
