On Monday, the company announced that its natural oil and gas output in Brazil rose 0.7% in February, over January, despite brief stoppages in the Santos Basin.
Petroleo Brasileiro Petrobras was identified as a "storm the castle" candidate by Trade-Ideas LLC based off of its average dollar volume of $438.3 million, having traded 17.3 million shares (by 12:40pm) Wednesday, trading at 1.64 times its normal volume for that time of day and having crossed above its 200-day simple moving average.
TheStreet Ratings team rates PETROBRAS-PETROLEO BRASILIER as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
"We rate PETROBRAS-PETROLEO BRASILIER (PBR) a HOLD. The primary factors that have impacted our rating are mixed some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its attractive valuation levels, largely solid financial position with reasonable debt levels by most measures and notable return on equity. However, as a counter to these strengths, we also find weaknesses including poor profit margins, weak operating cash flow and a generally disappointing performance in the stock itself."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Regardless of the drop in revenue, the company managed to outperform against the industry average of 7.9%. Since the same quarter one year prior, revenues slightly dropped by 0.2%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- PBR's debt-to-equity ratio of 0.76 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 0.98 is weak.
- Net operating cash flow has decreased to $4,734.00 million or 16.58% when compared to the same quarter last year. Despite a decrease in cash flow of 16.58%, PETROBRAS-PETROLEO BRASILIER is in line with the industry average cash flow growth rate of -23.15%.
- The gross profit margin for PETROBRAS-PETROLEO BRASILIER is currently lower than what is desirable, coming in at 28.99%. It has decreased from the same quarter the previous year. Regardless of the weak results of the gross profit margin, the net profit margin of 7.75% is above that of the industry average.
- You can view the full analysis from the report here: PBR Ratings Report