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NEW YORK (TheStreet) -- Petrobras (PBR.A) - Get Petróleo Brasileiro SA Report stock is falling 0.75% to $3.96 in late morning trading on Monday after Chairman Murilo Pinto de Oliveira Ferreira stepped down.

The Vale (VALE) CEO has been on a leave of absence since September 14 and was expected to return this week.

Interim Chairman Luiz Nelson Guedes de Carvalho will remain in his position until the board can discuss a successor at the next board meeting.

Ferreira may be leaving to focus on Vale, a Brazilian mining company that is under pressure for a dam burst earlier this month, Reuters reports.

The Brazilian government is preparing to sue Vale and its partner BHP Billiton (BHP) for about $5.24 billion to pay for damages related to the two dams outbreak.

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The Minas Gerais, Brazil dams are operated by Samarco, a joint venture between BHP Billiton and Vale.

Separately, TheStreet Ratings team rates PETROLEO BRASILEIRO SA- PETR as a Sell with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation:

We rate PETROLEO BRASILEIRO SA- PETR (PBR.A) a SELL. This is driven by a few notable weaknesses, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its disappointing return on equity, weak operating cash flow, generally disappointing historical performance in the stock itself and generally high debt management risk.

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market, PETROLEO BRASILEIRO SA- PETR's return on equity significantly trails that of both the industry average and the S&P 500.
  • Net operating cash flow has decreased to $6,147.00 million or 40.62% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
  • PBR.A's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 62.16%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
  • Currently the debt-to-equity ratio of 1.73 is quite high overall and when compared to the industry average, suggesting that the current management of debt levels should be re-evaluated. Even though the debt-to-equity ratio is weak, PBR.A's quick ratio is somewhat strong at 1.24, demonstrating the ability to handle short-term liquidity needs.
  • PBR.A, with its decline in revenue, slightly underperformed the industry average of 36.7%. Since the same quarter one year prior, revenues fell by 40.3%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • You can view the full analysis from the report here: PBR.A

Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of Jim Cramer, TheStreet or any of its contributors.