(Image: iStock/GutoSantos)
O Bank of America raised the target price of Petrobras (PETR3;PETR4) from R$47 to R$51, which opens up a potential increase of 40% compared to the close of this Wednesday (18). The recommendation is to buy.
The elevation occurs after the BofA update the estimates of oil. In addition, the bank changed the exchange rates with more recent forecasts.
BofA lowered its forecast for Brent for 2025 from US$80/bbl to US$75/bbl.
“In this context, despite the lower Brent for the second quarter of 2025, we are increasing the target prices for most companies,” he says.
According to the bank, slower economic growth and a softer demand profile should lead to greater inventory buildups next year.
Also according to BofA, the mismatch between global demand and supply growth rates in countries that do not belong to the OPEC creates a riddle for the OPEC+which expected to regain market share in the fourth quarter and 2025.
According to analysts, there are two scenarios ahead:
- the group could sit tight and wait for higher prices as non-OPEC supply provides the barrels needed to meet global oil demand;
- they could increase output at the expense of prices and revenues in the hope of eventually pushing higher-cost producers out of the market;
“The former is BofA’s baseline. The latter, a market share war, could send Brent crude prices down to an average of $60/bbl next year,” he says.
Other oil companies
In relation to other oil companies, BofA raised its target price for PetroReconcavo (RECV3) from R$29 to R$31, with a purchase rating.
“We adjusted the risk-free rate from 4.5% to 4.0%, but the positive effect was partially offset by a lower tax rate as we incorporated interest payments on equity into our model.”
Additionally, it raised the target price of Prio (PRIO3) from R$60 to R$66, also with a purchase recommendation.