After much noise and confusion surrounding this issue, analysts and investors announced that Petrobras announced a special dividend totaling 21.9 billion reais (approximately 1.76 reais per share), equivalent to 50% of the company's capital reserves. , but it is already attracting attention. the other half. It is expected that the remaining amount may be announced in the second half of this year.
On Friday, the preferred stock (BVMF: PETR4) rose by 0.78% to close at R$41.41. ADR (NYSE:PBR) rose 2.54% to $17.05.
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Petrobras faced volatility in its stock price in March when it announced a dividend without disclosing the amount of additional profits. But the company is on an upward trajectory as analysts' perceptions have changed following media reports suggesting agreement on the issue by the government, the company's largest shareholder. This situation also concerns the company's president, Jean-Paul Prates, who had previously insisted on paying this part, as well as other government officials who opposed this part of the payment and sought to withhold it. , which also led to increased tensions with Mines and Energy Minister Alexandre Silveira. Nevertheless, Silveira said Petrobras' board needs to prioritize “the needs of the Treasury.” The federal government is expected to receive a special dividend of about 6 billion reais from Petrobras, as the balance of public finances becomes an issue.
Bank of America (NYSE:BAC) (BofA) believes the announcement is a “step in the right direction” and will help allay investor concerns about Petrobras' growth agenda, which likely This will lead to increased investment, mergers and acquisitions. Expenses for increasing dividends.
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With this distribution, BofA estimates Petrobras will have a dividend yield of 16% this year, which would be higher than the industry average of about 8.7%. The bank said it is also important to note that this news shows that the government does not rule out the possibility of paying the remaining amount of the capital remuneration reserve in the second half of the year, i.e. a further 22 billion reais. I believe. “A decision on this will be made in the coming months,” BofA emphasized, with a neutral recommendation and a $16.80 price target for the ADR.
According to Itau BBA, the announcement confirms the board's previous green light that the payment of 50% of the capital reserve as a special dividend will not jeopardize the financial sustainability of the state-owned company. That's what it means.
“Furthermore, the possibility that the company will pay out the remaining 50% of its capital reserves as a special dividend in the second half of this year is a positive option that increases the attractiveness of holding the shares,” Itau BBA noted in a report issued to clients. ing. The market has recommended Market Perform for the company's stock, with a preferred stock target price of R$43 and an ADR target price of $16.7.
EQI Investimentos considers the state-owned company to be the “biggest star” of its dividend portfolio, but says: “Given its strong quarterly performance, it will not be difficult for the company to pay out the remaining 50% by the end of the year.” thinking. Expected throughout 2024. ”
Meanwhile, Genial Investimentos believes that the total distribution amount is “technically justified given the current level of oil prices, low extraction levels and the debt under management.”
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What InvestingPro says about Petrobras
Petrobras pays large dividends to shareholders and its stock has delivered strong returns over the past year, according to InvestingPro. His Protips, which are insights from artificial intelligence (AI) based on fundamental indicators, also show that the company has made significant profits over the past five years.
Petrobras' financial health is considered to be excellent, rated 4 out of 5 on a scale ranging from 1 to 5.
According to 14 investment models compiled by InvestingPro, the fair value of Brazil's preferred stock is estimated at R$60.19, with an expected appreciation rate of 45%. Analysts are more pessimistic with a target of 42.13 reais.
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