Petrobras (PBR.A) Stock Upgraded at JPMorgan

NEW YORK (TheStreet) -- Shares of Petrobras (PBR.A) were gaining 0.7% to $8.41 Monday after JPMorgan upgraded the Brazilian oil company.

In a note to investors, JPMorgan upgraded Petrobras to "overweight" from "neutral," according to Barron's. The analyst firm set a price target of $10.50 for the oil company, highlighting its efforts to improve investors' confidence.

"It is time for a more constructive and pragmatic approach to look at PBR, given that the controlling shareholder not only has the capability, but is eager to improve investors' perception of PBR," JPMorgan analysts wrote. "The high indebtedness level combined with a recurrent weak or negative cash flow generation up to 2021 turns PBR's investment case even more challenging, with little room for mismanagement practices or political interference."

The analysts continued, "Although we believe that the definition and disclosure of a pricing formula for downstream is unlikely to take place in the ongoing administration, we are confident that the government will avoid at any cost major losses at refining."

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 several 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, generally high debt management risk, generally disappointing historical performance in the stock itself and feeble growth in its earnings per share."

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