By Chan Tien Hin
March 27 (Bloomberg) -- Petroleo Brasileiro SA, Brazil’s state-controlled oil company, had its stock rating cut to “hold” from “buy” at Deutsche Bank AG after the shares met their price target.
Petrobras, as the company is known, yesterday dropped 0.6 percent to $34.20 after rising as high as $35.30 in U.S. trading, past the bank’s $35 estimate. The “limited” increase in Deutsche Bank’s fourth-quarter 2009 oil price forecast, to $50 a barrel from $40, means Petrobras’s earnings estimates have increased “modestly,” the bank said in a report today.
Shares of the company have surged 39 percent this year, making the stock the best performer on Brazil’s Bovespa index, which has advanced 13.4 percent. The rally reflected a rebound for commodity producers, along with metal and oil prices.
“Now that the stock has reached our price target and with no certainty on the sustainability of the current oil price rally, we recommend investors to take a pause on adding positions,” Deutsche Bank’s analyst Marcus Sequeira wrote in the report.
Deutsche Bank’s downgrade comes less than two weeks after Credit Suisse Group said Petrobras’s valuation is “unwarranted” and earnings may decline, given the cloudy outlook for oil prices.
To contact the reporter on this story: Chan Tien Hin in Kuala Lumpur at thchan@bloomberg.net
Posts
No comments:
Post a Comment