Given the recent increase in Brent oil prices, which is a price reference for Petrobras (PETR4), Goldman Sachs carried out a sensitivity analysis on the impact on the state-owned company’s results. The commodity has accumulated gains of around 13% throughout this year, amid global geopolitical and exchange rate tensions. Meanwhile, Petrobras did not increase the prices of gasoline and diesel this year, with market participants pointing to an increase in the lag, which generates new fear for the shares.
Last Thursday (18), company president, Jean Paul Prates, said he saw no reason to change fuel prices. “We are evaluating the international scenario and, for now, there is nothing that makes us move (prices), and the price of oil itself indicates this”, he commented.
The American bank concluded that a rise in oil prices is positive for Petrobras both from the point of view of Ebitda (earnings before interest, taxes, depreciation and amortization) and FCF (free cash flow), even if the state-owned company freezes fuel prices in the domestic market.
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This is because, according to the bank, the effect of lower refinery margins in a scenario of no pass-through in diesel and gasoline prices should be more than offset by stronger results with oil exports and the sale of other refined products. (e.g. aviation fuel and bunker).
According to calculations, in a scenario of freezing diesel and gasoline prices, each increase of US$10 per barrel in Brent prices could lead to an increase of around US$3 billion in EBITDA and an increase of around of US$ 2 billion in FCF (increase of US$ 1.4 billion in FCF if Petrobras imported fuels at a loss in this scenario).
The bank’s analyst team comments that although this is not the base case, given the governance framework in place, this has been a frequent question from investors (the effects of a possible freeze in fuel prices).
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Goldman highlights that while Brent crude prices are up 13% year-to-date, diesel prices in the Gulf of Mexico are up just 5% year-to-date as weaker margin spreads partially offset the impact of higher prices. crude oil highs.
Additionally, fuel inventories held by distributors may currently be at healthy levels, as the sector accelerated imports late last year to likely benefit from inventory gains.
In the bank’s view, these factors may have reduced the pressure on Petrobras to adjust prices upwards (as dependence on additional imports is lower in a context of healthy inventories), despite the recent increase in Brent. For reference, the bank currently sees the state-owned company’s diesel at around 8% below the ANP’s international benchmark.
Finally, Goldman Sachs maintains a purchase recommendation for Petrobras’ preferred and common shares, with a target price of, respectively, R$44.90 and R$49.40 for PETR4 and PETR3 assets, or an upside potential of 8 .5% and 14% compared to the previous day’s closing. The preference in the sector continues, however, for PRIO shares (PRIO3).
