Braskem shares soar after bank raises buy recommendation for shares (Image: Disclosure/Braskem)
The actions of the Braskem (BRKM5) jumped 9% in the first hour of trading and led the gains of the Ibovespa (IBOV) since the opening of negotiations.
At the day's high, the shares rose 9.00% to R$20.59. Around 11:30 am (Brasília time), BRKM5 advanced 5.29%, to R$ 19.89. Follow in Real Time.
The impetus for the strong positive performance is the upgrade of the recommendation from neutral to buy by UBS BB.
The bank also revised its target price upwards, from R$22 to R$28 – which represents a potential appreciation of 48.2% compared to the closing price last Tuesday (17).
For analysts, Braskem shares are trading close to their all-time high, amid a downward cycle in the petrochemical sector.
“Petrochemicals is a cyclical business, typically taking 5 to 7 years for a cycle to be completed. After more than two years in a down cycle, we think a mid-cycle recovery is expected at some point,” say Luiz Carvalho, Tasso Vasconcellos and Matheus Enfeldt in a report.
More reasons to keep an eye on Braskem
In addition to stocks close to their all-time high, analysts highlight that risks are “skewed upwards” in relation to spreads (difference between buying and selling prices) following the recent decline in the price of Brent oil – as most raw material prices are linked to the commodity.
Potentially higher import tariffs are also triggers for stocks to rally in the near term, according to UBS analysts.
“Current import tariffs in Brazil are 12.6% and the industry is requesting an increase to 20%, which could support Braskem’s regional prices,” write Luiz Carvalho, Tasso Vasconcellos and Matheus Enfeldt in a report.
In the bank's base scenario, the company will be able to pass on half of the potential increase from 2025 onwards.
According to analysts, the full transfer (100%) of the potential increase in tariffs would result in an additional 5% to 10% in the projections for earnings before interest, taxes, amortization and depreciation (EBITDA) for 2025 – reaching almost US$ 2.0 billion.
Impasse or Novonor
Last Tuesday (17), Braskem reported that there was no progress in the discussions regarding the sale of Novonor's stake in the company. It is worth remembering that the former Odebrecht holds 50.1% of the petrochemical company's capital.
The petrochemical company also said that Petrobras – which has a 47% stake in Braskem – has not made a decision on the matter.
The statement was released in response to a note from columnist Lauro Jardim, from O Globo, that creditor banks are studying the creation of a fund in which credits would be converted into shares.