After the announcement of federal government of yet another change in the presidency of the Petrobras the state-owned company’s shares fell this Tuesday (24) in stock Exchange Brazilian market, reflecting caution among investors due to uncertainties around what could change with the company’s fourth president in a year.
The company’s preferred share (PETR4) closed down 2.92%, quoted at R$31.60, after falling more than 4.5% throughout the day. The common paper (PETR3) devalued 2.85%, closing at R$ 34.40. In the morning, it retreated about 4%.
This is not the first time this movement has taken place. When the president’s government Jair Bolsonaro (PL) made the first change in the presidency in April 2021, dismissing Roberto Castello Branco, the shares also retreated, but later showed a recovery.
For experts consulted by the CNN Brasil Business , it is still too early to say whether the same will happen now. The exchange takes place in a complex context, and any change in the company’s pricing policy would be very poorly received by the market, they assess.
At the same time, they point to the fact that shares are discounted, a term used to refer to securities whose quotation on the stock exchange is lower than it should be, considering their financial characteristics and context. Therefore, the state-owned company is still attractive.
What to do with Petrobras shares?
Specialists’ recommendations for Petrobras shares are different depending on the investor profile.
If the person already has shares in the company, the recommendation of Flávio Conde, head of equity at Levante, and Alan Gandelman, CEO of Planner Corretora, is to keep them. “The vast majority of brokerages put Petrobras with the possibility of earning and higher than the prices practiced, even with these issues of exchanges”, highlights the CEO of Planner.
The drop on Tuesday, according to Conde, is normal as the market does not like this type of intervention, but it is common for them to recover later, as investors understand what will or will not change in the company, as in previous exchanges.
The economist believes that investors will give the “benefit of the doubt” to the government precisely because of the previous cases. Even with the fall, “what really counts is Thursday’s price, on the first day it falls, the second it rises, from there it balances out”.
“Those who have shares and are investors should not sell, and shares are not expensive, it is still a cheap company, and it is already incorporating the risk that readjustments will take time due to high profits”, he evaluates.
Gandelman says he still sees potential for an increase in Petrobras shares, and that Tuesday’s retreat was another one-off retreat at a time of scare and uncertainty, with the stock Exchange in a volatile environment.
“If the fall continues for more days, the stock is even more attractive than it is, it may be a good time to buy, but the scenario as a whole in the stock market is one of volatility, going from one side to the other”, he says.
As for those who still do not have shares, Conde says that, in general, Levante does not recommend buying any state-owned shares due to the possibility of interventions.
He says there are less risky opportunities in the market for those interested in certain industries or types of companies.
In the case of oil, 3R Petroleum and PetroRio would be good options, as they are private companies and do not risk government interference.
Gandelman considers that PetroRio and 3R are different companies from Petrobras, and that it is worth understanding how they work. In general, they are oil exporters and follow international prices, which makes them have a different logic from Petrobras .
If the search for discounted state-owned shares, Conde believes that the shares of Bank of Brazil with less risk of intervention, and the electrobras , about to be capitalized, are better options. And if the interest is in commodities in general, there is the option of metallurgical companies, such as Vale and Gerdau, all private.
Learn more about oil and how its quotation works
For the market, the great fear is that the change in the presidency also represents an effort by the federal government to change Petrobras’ pricing policy. However, Gandelman assesses that the hypothesis is currently unlikely.
“The reading is that the new president is very aligned with the [ministro da Economia] Guedes, and it is not expected that there will be anything significant in Petrobras’ pricing policy”, he says, referring to Caio Mário Paes de Andrade, appointed by the government.
However, he points out that, if there is a change in pricing policy, there would be a strong negative influence on shares, since the state would be “damming prices with rising costs, reducing profits”.
Flávio Conde recalls that previous changes in the presidency did not result in changes in policy, which is positive, despite threats in this regard. “Whoever endured the hardship during the exchanges did well, because the shares recovered”, he ponders.
However, he says that the scenario is one of uncertainty, and that the government may end up pressuring the new president to increase the time space between readjustments in the fuels from 70 to 180 days, which would not exactly be a violation of the policy, which does not define readjustment deadlines, but would still insure high fuel prices and affect Petrobras’ profit.
“The gap between Brazilian gasoline at the refinery and the market parameter was 30% last week, and when it gets to a high number like this, there is pressure for some kind of readjustment. Normal is a lag of 10%, 15%. That would suggest an increase of around 10% to 15% over the next few days, that should be on the table,” he says.
If the readjustment does not occur, the market may become more afraid of the company, harming the shares. At the same time, Conde assesses that Petrobras’ profit, thanks to the rise in fuel prices, is so high that spacing out the readjustments would not lead to a loss, only a reduction in profit.
“In addition, we are increasingly facing the elections, and for the government it would be very good if from June onwards Petrobras did not increase the price”, he emphasizes.
For Gandelman, it is already possible to notice a high spacing between the readjustments of the Gasoline since the last one occurred about 7 weeks ago and oil remains high, generating a lag.
For this reason, the government’s move “may indeed be happening, but in a veiled way, no one will tell the public that the policy has changed”. He assesses that, if the market notices this movement, which would be easily noticed, the shares would also fall as they represent interference.
Even so, for him, the most likely thing is that the government will look for other alternatives to reduce gasoline and diesel prices or at least avoid new highs, such as the bill that reduces the ICMS charged on fuels .
“The majority shareholder is the government, and if you mess with politics and harm Petrobras, the dividends get smaller and they also harm the government. The price policy itself benefits the federal funds, it is an equation that is obviously known by the Ministry of Economy”, he says.
The two risks for the shares, according to Conde, would be the government not allowing any readjustment in fuels or the company’s pricing policy changing after the elections how suggested by former president Lula (PT) , candidate in the election. The second risk, however, is further away, and should not yet influence stocks.
Source: CNN Brasil