NEW YORK (TheStreet) -- Shares of Petrobras  (PBR) - Get Report closed slightly higher by 0.3% to $6.66 on Friday despite JPMorgan's assessment that credit downgrades could hit the Brazilian state-owned energy company shortly.

Moody's Investor Service, Fitch Ratings, and Standard & Poor's each rate Petrobras' credit at one notch above high yield, but JPMorgan said in a research note Friday that Moody's and Fitch ratings are under review for a possible downgrade, and Moody's could act first.

"Moody's could be the first to act in terms of a downgrade. [It is] only giving Petrobras until the end of the month to show some progress regarding the publication of audited financials, including expected impairments," the firm wrote.

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"Even though the credit ratings are still investment grade, the stand-alone credit rating of Petrobras (without factoring the sovereign support) is already high yield for the three rating agencies," JPMorgan continued. "Clearly, the common factor for all the agencies for a downgrade would be an acceleration of debt in the case that the company breaches the reporting covenant."

Petrobras recently named Aldemir Bendine as its new CEO to replace Maria das Gracas Silva Foster.

Separately, 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 revenue growth, largely solid financial position with reasonable debt levels by most measures and attractive valuation levels. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity, weak operating cash flow and poor profit margins."

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

  • The revenue growth came in higher than the industry average of 20.6%. Since the same quarter one year prior, revenues slightly increased by 3.8%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • The debt-to-equity ratio is somewhat low, currently at 0.84, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.30, which illustrates the ability to avoid short-term cash problems.
  • PETROBRAS-PETROLEO BRASILIER's earnings per share declined by 21.7% in the most recent quarter compared to the same quarter a year ago. Stable earnings per share over the past year indicate the company has sound management over its earnings and share float. However, the consensus estimates suggest that there will be an upward trend in the coming year. During the past fiscal year, PETROBRAS-PETROLEO BRASILIER's EPS of $1.70 remained unchanged from the prior years' EPS of $1.70. This year, the market expects an improvement in earnings ($2.64 versus $1.70).
  • Net operating cash flow has decreased to $6,413.00 million or 18.05% when compared to the same quarter last year. In conjunction, when comparing current results to the industry average, PETROBRAS-PETROLEO BRASILIER has marginally lower results.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. In comparison to the other companies in the Oil, Gas & Consumable Fuels industry and the overall market, PETROBRAS-PETROLEO BRASILIER's return on equity is significantly below that of the industry average and is below that of the S&P 500.
  • You can view the full analysis from the report here: PBR Ratings Report