Value
7.8/10data confidence 50%| Component | Sub-score |
|---|---|
| P/S | 10.0 |
| EV/EBITDA | 2.2 |
| Analyst target | 9.0 |
- ▸Attractively valued
BAK · Why this verdict
Why Braskem (BAK) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictSELL
Overall score4.6/10
ConfidenceMEDIUM
MacroNEUTRAL
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
With a market capitalization of $0.84 billion, the company falls below the $1 billion minimum investable threshold, excluding it from most institutional mandates and reducing the pool of potential buyers that could sustain price support. Warnings | Market capitalization rises above $1.5 billion for 2 consecutive months before the size constraint is meaningfully resolved. | →Stable |
| CounterA sub-$1 billion market cap can also signal a deep-value recovery opportunity where re-entry into the investable universe triggers a significant institutional re-rating event for investors willing to tolerate the illiquidity. | ||
The company is burning cash at a rate equal to 10% of revenue, carries a Piotroski financial health score of only 3 out of 9, and has been assessed as having no competitive moat — a combination signaling acute fundamental distress rather than a temporary cyclical trough. Quality breakdown | Free cash flow turns positive and the Piotroski score improves above 5 out of 9 for 2 consecutive quarters before the quality picture can be reassessed. | →Stable |
| CounterAnalyst estimates have been revised upward by 44% in the last 30 days, which — if grounded in real cost reduction or commodity price recovery — could move the company toward cash generation faster than the current score implies. | ||
Revenue has contracted 20% year-over-year and the company missed earnings estimates in 2 of the last 3 reported quarters — including a 239% miss below expectations in the most recent quarter — making it difficult to underwrite a near-term earnings recovery with confidence. Earnings | Revenue growth turns positive year-over-year and EPS comes within 10% of consensus estimates for 2 consecutive quarters before the fundamental thesis can be revisited. | →Stable |
| CounterWith RSI at deeply oversold levels and on-balance volume rising, a technical re-rating is possible even before fundamentals recover, potentially producing a sharp short-covering bounce that precedes the fundamental turn. | ||
A 44% upward revision to analyst estimates over the last 30 days introduces a speculative element — if the revision cycle has legs, it may attract momentum buyers even before underlying fundamentals improve meaningfully. Catalyst breakdown | Analyst estimates continue rising for at least 2 more consecutive months and the EPS revision trend produces a beat rather than a miss in the next reported quarter, validating the revision cycle. | →Stable |
| CounterWith an average EPS surprise of negative 25% over the last four quarters and negative news sentiment, there is a meaningful probability that the revision cycle overshoots the underlying reality and is followed by another material miss, trapping speculative buyers who acted on the estimate momentum. | ||
With a market capitalization of $0.84 billion, the company falls below the $1 billion minimum investable threshold, excluding it from most institutional mandates and reducing the pool of potential buyers that could sustain price support.
→StableWarnings
- Expectation
- Market capitalization rises above $1.5 billion for 2 consecutive months before the size constraint is meaningfully resolved.
CounterA sub-$1 billion market cap can also signal a deep-value recovery opportunity where re-entry into the investable universe triggers a significant institutional re-rating event for investors willing to tolerate the illiquidity.
The company is burning cash at a rate equal to 10% of revenue, carries a Piotroski financial health score of only 3 out of 9, and has been assessed as having no competitive moat — a combination signaling acute fundamental distress rather than a temporary cyclical trough.
→StableQuality breakdown
- Expectation
- Free cash flow turns positive and the Piotroski score improves above 5 out of 9 for 2 consecutive quarters before the quality picture can be reassessed.
CounterAnalyst estimates have been revised upward by 44% in the last 30 days, which — if grounded in real cost reduction or commodity price recovery — could move the company toward cash generation faster than the current score implies.
Revenue has contracted 20% year-over-year and the company missed earnings estimates in 2 of the last 3 reported quarters — including a 239% miss below expectations in the most recent quarter — making it difficult to underwrite a near-term earnings recovery with confidence.
→StableEarnings
- Expectation
- Revenue growth turns positive year-over-year and EPS comes within 10% of consensus estimates for 2 consecutive quarters before the fundamental thesis can be revisited.
CounterWith RSI at deeply oversold levels and on-balance volume rising, a technical re-rating is possible even before fundamentals recover, potentially producing a sharp short-covering bounce that precedes the fundamental turn.
A 44% upward revision to analyst estimates over the last 30 days introduces a speculative element — if the revision cycle has legs, it may attract momentum buyers even before underlying fundamentals improve meaningfully.
→StableCatalyst breakdown
- Expectation
- Analyst estimates continue rising for at least 2 more consecutive months and the EPS revision trend produces a beat rather than a miss in the next reported quarter, validating the revision cycle.
CounterWith an average EPS surprise of negative 25% over the last four quarters and negative news sentiment, there is a meaningful probability that the revision cycle overshoots the underlying reality and is followed by another material miss, trapping speculative buyers who acted on the estimate momentum.
TrendMatrix Research · core thesis
Engine thesis — one sentence
Braskem sits outside the investable universe by market capitalization at $0.84 billion — below the $1 billion minimum threshold — and carries cash-burning operations with free cash flow negative at 10% of revenue, a 20% revenue decline, and a Piotroski financial health score of only 3 out of 9; despite a sharp 44% upward revision to analyst estimates over the last month, the fundamental setup does not support investment.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Per-dimension breakdown
Quality
1.2/10data confidence 100%| Component | Sub-score |
|---|---|
| ROA | 0.0 |
| Gross margin | 0.0 |
| Op margin | 0.0 |
| Net margin | 0.0 |
| Current ratio | 2.8 |
| FCF quality | 0.0 |
| Moat | 3.8 |
| Piotroski F | 3.3 |
- ▸Cash-burning: FCF -10% of revenue
- ▸No competitive moat
- ▸Weak Piotroski F-Score: 3/9
- ▸Quality concerns
Growth
5.0/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 0.0 |
| EPS growth | 10.0 |
- ▸Declining revenue: -20%
Momentum
2.6/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 3.0 |
| MACD | 2.6 |
| OBV | 5.1 |
| MA position | 2.2 |
| Volume | 0.0 |
- ▸Capitulation risk (RSI 14, below 200MA)
- ▸Below 200-MA but MA still rising (+1.6%/30d) — pullback in uptrend, not confirmed weakness
Sentiment
5.6/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 2.5 |
| Analyst rating | 5.0 |
| Price target | 9.8 |
- ▸LLM news sentiment: -0.50 (n=1)
- ▸Analyst upside: 61%
Insider
5.0/10data confidence 50%Peer rank
4.1/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 9.3 |
| quality rank | 1.4 |
| growth rank | 0.7 |
Technical
5.7/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 8.3 |
| support resistance | 8.9 |
| 52w position | 0.0 |
Risk (lower is worse)
6.2/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 7.6 |
| days to cover | 8.8 |
| volatility | 0.0 |
| beta | 8.7 |
| news risk | 6.0 |
Catalyst
4.0/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 9.0 |
| earnings history | 1.1 |
| earnings timing | 5.0 |
| surprise avg | 0.0 |
| news activity | 5.0 |
- ▸Estimates up 44.0% (30d)
- ▸Earnings concerns: 1B/2M
How the verdict was assembled
Engine trigger
Quality below minimum threshold.
Engine technical detail
verdict_path:
L1:HARD_BLOCKPassed (7)
- ASYMMETRY:2.7>=1.5
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:39d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- MOMENTUM:2.6<4.5
Warning (0)
none
Reward-to-Risk
2.69
Upside
+40.4%
Downside
15.0%
Sizing output
AVOID
Setup— — No clear chart pattern; technical signals are mixed
EdgeInst Constrain — Small cap ($0.6B) below institutional reach
SuitabilitySpeculative — Drawdown -55% (>40% off 52w high)
Investment implication
The L1 gate blocked the positive-verdict path: a hard-floor threshold was breached, so dimensional pillars — including Value at 7.8 could not lift the engine output above the verdict floor. Failed gate signal: MOMENTUM:2.6<4.5.
The strongest dimensions are Value at 7.8, Risk (lower is worse) at 6.2, and Technical at 5.7; the weakest are Quality at 1.2, Momentum at 2.6, and Catalyst at 4.0. The V9 engine flagged 1 failed gate, producing an asymmetric reward-to-risk of 2.69 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Sub Investable Market Cap Barrier
Trip ifMarket capitalization exceeds $1.5 billion for 2 consecutive months, clearing the minimum investable threshold with margin.
- P2Cash Burning Deteriorating Quality
Trip ifFree cash flow rises above $0 for 2 consecutive quarters, removing the cash-burn concern.
- P3Revenue Contraction Unreliable Earnings
Trip ifRevenue growth exceeds 5% year-over-year for 2 consecutive quarters, reversing the current 20% contraction.
- P4Estimate Revision Cycle Speculative Signal
Trip ifEPS comes in within 5% above consensus estimates for 2 consecutive quarters, confirming the revision cycle has translated into actual earnings delivery.