Petrobras (PBR) Stock Slumps, Raymond James cuts to 'Underperform'
NEW YORK (TheStreet) -- Petrobras (PBR) - Get Report stock is down 5.19% to $6.40 in late-afternoon trading on Thursday after Raymond James downgraded the stock to "underperform" from "market perform."
The firm didn't assign a price target to the stock, but valued its book value at roughly $11 per share.
Shares of the Brazilian oil producer and refiner have performed the best of all large-cap oil stocks so far this year, the firm noted, Barron's reports.
The stock's gain of nearly 60% as of yesterday's market close outpaced the Energy Select Sector SPDR ETF (XLE) energy benchmark, all other significant energy indices, and Brazil's Bovespa index, Raymond James continued.
"Put simply, this stock has traded not on its own fundamentals but rather as a proxy for Brazilian politics, i.e., the impeachment of President Dilma Rousseff," the firm argued.
The downgrade reflects Raymond James's belief that the trade is over and Petrobras's multiple expansion "has run its course" following last week's Senate vote in favor of impeaching Rousseff.
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.
