Amid widespread panic in the market with the intervention of the president Jair Bolsonaro on Petrobras (PETR3; PETR4), The UBS BB stood out for the conviction with which maintained the recommendation to buy the papers yesterday (22). His position was reaffirmed in a new report on Tuesday (23), in which he listed five reasons for still believing in the company.
But, even for UBS BB, there are mistakes that the company and the government should not make, otherwise they will lose their support. “We believe that the Devil is in the details, and we see three key risks to our investment thesis,” say Luiz Carvalho and Gabriel Barra, who sign the analysis sent today to the institution’s clients.
The first is outside the control of the company and the government. This is an eventual jump in the dollar and international oil prices. It seems absurd, since Petrobras makes a living selling oil, but there is a reason for concern. Currently, the state company imports fuels to complete domestic demand.
In any case, analysts believe that this is a manageable risk. “Even taking a loss of US $ 10 per barrel of imported fuel and assuming a volume of 500 thousand barrels per day, this would cause an annualized impact of US $ 1.8 billion, or about 4% of the EBITDA”, he estimates the UBS BB.
The second risk is that the controlling shareholder, in this case, the federal government, will pressure Petrobras to adopt a fuel subsidy policy, repeating what happened during the government of Dilma Rousseff (2011-2016).
UBS BB trusts the strength of Petrobras’ bylaws and the laws that protect the interests of minority shareholders to contain the government’s temptation to interfere in the company’s readjustment policy. “We believe that the statute and the laws will protect the company from losses,” he says.
The worst mistake the oil company could make, in the bank’s assessment, is to suspend the process of selling assets, such as refineries. “For us, this is the critical issue, but we have not seen any more comments about it,” they say.