Petrobras (PBR) Stock Lower on Ratings Downgrade
NEW YORK (TheStreet) -- Shares of Petrobras (PBR) - Get Report are falling 2.85% to $7.85 in early-morning trading on Wednesday after Barclays cut its rating on the stock to "underweight" from "equal weight."
Additionally, the firm lowered its rating on shares of Petrobras preferred (PBR.A) to "equal weight" from "overweight."
"Between the two classes of shares, we believe the preferred currently offer much better value and upside potential," Barclays said.
Brazil's state-owned oil company faces added political risks due to the country's "deteriorating economic situation," which has made shares "less attractive" despite the stocks' "attractive" valuations, the firm noted.
Shares are under further pressure this morning as oil prices decline on the International Energy Agency's announcement that crude stockpiles continued to rise last month.
Additionally, the American Petroleum Institute reported that crude inventory unexpectedly increased by 2.2 million barrels last week.
Separately, TheStreet Ratings team rates the stock as a "sell" with a ratings score of D.
Petrobras's weaknesses include its deteriorating net income, generally high debt management risk, disappointing return on equity, weak operating cash flow and generally disappointing historical performance in the stock itself.
You can view the full analysis from the report here: PBR
TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this article's author.