Petrobras (PBR) Stock Rallies with Brazilian Real as President's Impeachment Procedure Resumes
NEW YORK (TheStreet) -- Petrobras (PBR) - Get Report stock is gaining 7.62% to $7.34 in afternoon trading on Tuesday as shares of Brazil-based companies advance on a stronger local currency.
The real is advancing after Waldir Maranhao, the head of the lower house in Brazil, reversed his decision to annul the impeachment vote that seeks to remove President Dilma Rousseff, Bloomberg reports.
"Yesterday's events prove once again that Brazilian politics have become very messy," NN Investment Partners senior strategist Maarten-Jan Bakkum told Bloomberg. "It is a full-blown institutional crisis. The impeachment process in itself will not be smooth."
Petrobras, a state-operated energy company, is expected to benefit if Rousseff leaves office since the potential successor, VP Michel Temer, would reverse policies that have boosted the company's debt.
Shares of Petrobras are also being helped by rising oil prices. Crude prices are advancing after production disruptions in Canada and Nigeria, according to Reuters.
WTI crude is rising 2.85% to $44.68 per barrel on the New York Mercantile Exchange, while Brent crude is increasing 4.49% to $45.59 per barrel on the Intercontinental Exchange this afternoon.
Separately, Petrobras has a "sell" rating and a letter grade of D at TheStreet Ratings because of the company's weak return on equity, disappointing stock performance and generally high debt management risk.
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.
