NEW YORK (TheStreet) -- Shares of Petroleo Brasileiro Petrobas (PBR.A) are moving higher 0.06% to $8.44 on speculation that the Brazil-based state-run oil company will reduce its investments by 40% to $130 million for 2015 to 2019, Bloomberg reports.
"They had a grandiose plan, which was out of sync with what's happening with the company," Leme Investimentos economist Joao Pedro Brugger stated.
Reducing investments will help the company recover from the industry's heaviest debt load and retain an investment-grade credit rating, Bloomberg said.
However, other challenges still remain, which include crude prices, which are close to a six-year low.
The company will discuss its five-year business plan at a meeting this Friday, along with potential asset sales, Bloomberg noted.
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, generally high debt management risk, generally disappointing historical performance in the stock itself and feeble growth in its earnings per share."
Highlights from the analysis by TheStreet Ratings Team goes as follows: