NEW YORK (TheStreet) -- Shares of Petrobas Brasileiro S.A. (PBR) are declining 2.02% to $9.22 on Monday after the Brazilian state-owned energy company cut its five-year investment budget by 37% to $130 billion from $206.8 billion, Bloomberg reports.
"Petrobras is giving up a dream of becoming one of the world's biggest oil producers by cutting spending and output targets," Bloomberg said.
This action comes as the company is urgently trying to reduce debt and recover investor confidence amid a corruption scandal, The Wall Street Journal reports.
Domestic oil production will be lowered to 2.8 million barrels a day in 2020, compared with a prior target of 4.2 million, the Rio de Janeiro-based company stated.
In addition, shares of Petrobas are falling due to declining oil prices. Crude oil (WTI) is tumbling 1.88% to $58.51 per barrel and Brent crude is sliding 2.02% to $61.89 per barrel, accordignn to the CNBC.com index.
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 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."