Value
8.0/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 10.0 |
| P/S | 10.0 |
| EV/EBITDA | 10.0 |
| Fwd P/E | 9.7 |
| PEG | 3.0 |
| Analyst target | 7.5 |
- ▸Forward P/E: 6.8x
- ▸PEG: 4.12
- ▸Attractively valued
PBR-A · Why this verdict
Why Petroleo Brasileiro S.A. Petrob (PBR-A) is rated BUY WAIT
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictBUY WAIT
Overall score5.7/10
ConfidenceMEDIUM
MacroNEUTRAL
TrendMatrix Research · core thesis
Engine thesis — one sentence
Petrobras preferred shares offer 68% margin of safety at a forward P/E of 6.3x with 26% return on equity, a 3-for-4 earnings beat streak, and 45% analyst upside — presenting a medium-conviction deep value case with a risk/reward ratio of 8.48 favoring bulls.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Petrobras preferred shares trade at a 68% margin of safety with a forward P/E of 6.3x and analyst consensus implying 45% upside to roughly $19.49, representing one of the deepest value setups in the energy sector with a risk/reward ratio of 8.48. Valuation breakdown | Price rises above $19.00 within 12 months as the margin of safety narrows toward fair value. | →Stable |
| CounterA 68% margin of safety in a Brazilian state-controlled company often reflects political risk, dividend policy uncertainty, and persistent earnings volatility — all of which are legitimate structural discounts rather than temporary mispricing. | ||
Petrobras preferred has beaten earnings estimates in 3 of the last 4 quarters with an average positive surprise of 9.4%, while maintaining a 26% return on equity and 22% margins — indicating consistent delivery against a reasonably calibrated earnings bar. Earnings | Earnings beat consensus by more than 5% in at least 2 of the next 4 quarters, sustaining the majority-beat pattern. | →Stable |
| CounterThe one recent miss was a severe 26% shortfall, indicating that estimate volatility remains high and individual misses can be large even when the majority-beat pattern holds. | ||
With RSI at 20 — deeply oversold — near the Bollinger lower band and rising on-balance volume, the preferred shares show classic mean-reversion setup conditions with strong technical support and resistance scores above 9.0. Momentum breakdown | RSI recovers above 35 within 30 days and price holds above $14.95 stop-loss, confirming the oversold bounce. | ↑Improving |
| CounterOversold conditions can persist for months in low-liquidity preferred share series; the put/call ratio of 1.80 indicates options markets carry material downside hedging. | ||
With a 5.26 asymmetry ratio — 26.3% upside potential versus 5.0% downside to stop — the preferred shares offer unusually favorable risk-adjusted return potential that justifies a medium-sized position per quantitative position sizing. Position sizing | Price reaches above $18.00 within 12 months while holding above the $14.95 stop, delivering a realized asymmetry ratio above 3.0. | — |
| CounterAsymmetry ratios calculated from analyst targets assume targets are reliable; for a Brazilian state company, analyst targets carry higher uncertainty than for developed-market peers and the 45% upside may be slow to materialize. | ||
Petrobras preferred shares trade at a 68% margin of safety with a forward P/E of 6.3x and analyst consensus implying 45% upside to roughly $19.49, representing one of the deepest value setups in the energy sector with a risk/reward ratio of 8.48.
→StableValuation breakdown
- Expectation
- Price rises above $19.00 within 12 months as the margin of safety narrows toward fair value.
CounterA 68% margin of safety in a Brazilian state-controlled company often reflects political risk, dividend policy uncertainty, and persistent earnings volatility — all of which are legitimate structural discounts rather than temporary mispricing.
Petrobras preferred has beaten earnings estimates in 3 of the last 4 quarters with an average positive surprise of 9.4%, while maintaining a 26% return on equity and 22% margins — indicating consistent delivery against a reasonably calibrated earnings bar.
→StableEarnings
- Expectation
- Earnings beat consensus by more than 5% in at least 2 of the next 4 quarters, sustaining the majority-beat pattern.
CounterThe one recent miss was a severe 26% shortfall, indicating that estimate volatility remains high and individual misses can be large even when the majority-beat pattern holds.
With RSI at 20 — deeply oversold — near the Bollinger lower band and rising on-balance volume, the preferred shares show classic mean-reversion setup conditions with strong technical support and resistance scores above 9.0.
↑ImprovingMomentum breakdown
- Expectation
- RSI recovers above 35 within 30 days and price holds above $14.95 stop-loss, confirming the oversold bounce.
CounterOversold conditions can persist for months in low-liquidity preferred share series; the put/call ratio of 1.80 indicates options markets carry material downside hedging.
With a 5.26 asymmetry ratio — 26.3% upside potential versus 5.0% downside to stop — the preferred shares offer unusually favorable risk-adjusted return potential that justifies a medium-sized position per quantitative position sizing.
—Position sizing
- Expectation
- Price reaches above $18.00 within 12 months while holding above the $14.95 stop, delivering a realized asymmetry ratio above 3.0.
CounterAsymmetry ratios calculated from analyst targets assume targets are reliable; for a Brazilian state company, analyst targets carry higher uncertainty than for developed-market peers and the 45% upside may be slow to materialize.
Per-dimension breakdown
Quality
6.7/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 8.5 |
| ROA | 5.5 |
| Gross margin | 5.5 |
| Op margin | 10.0 |
| Net margin | 10.0 |
| Current ratio | 3.0 |
| FCF quality | 5.8 |
| Moat | 5.6 |
| Piotroski F | 6.7 |
- ▸Excellent ROE: 26%
- ▸Strong margins: 22%
- ▸Earnings quality warning: 77% FCF/NI
Growth
1.6/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 2.6 |
| EPS growth | 0.6 |
Momentum
7.2/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 3.7 |
| MACD | 10.0 |
| OBV | 10.0 |
| MA position | 9.0 |
| Volume | 3.5 |
- ▸Overbought (RSI 85)
- ▸Volume accumulation (rising OBV)
- ▸Above 200-day MA
Sentiment
7.0/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 6.9 |
| Price target | 8.8 |
| erm sentiment | 5.0 |
- ▸Light analyst coverage (9.0) — signal dampened
- ▸Analyst upside: 33%
Insider
5.0/10data confidence 50%Peer rank
5.3/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 8.4 |
| quality rank | 7.6 |
| growth rank | 2.9 |
- ▸Attractive P/E vs peers
- ▸Superior ROE vs peers
Technical
3.2/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 0.2 |
| support resistance | 0.7 |
| 52w position | 6.8 |
| gap | 5.0 |
Risk (lower is worse)
5.5/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 9.3 |
| days to cover | 7.4 |
| volatility | 7.3 |
| put call | 0.0 |
| max pain risk | 3.0 |
| debt equity | 6.0 |
- ▸Elevated put/call: 11.67
- ▸Above max pain $2
Catalyst
6.3/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 6.7 |
| surprise avg | 7.2 |
| dividend safety | 6.2 |
- ▸Strong earnings: 3B/1M
- ▸Dividend: 10.7%
How the verdict was assembled
Engine trigger
V9 Gate blocked: R/R 1.1x at spot < 1.5 minimum. Wait for improvement.
Engine technical detail
verdict_path:
L4:PATH_A_DEEP_VALUE->V9:POOR_ASYMMETRY|ENTRY_STICKY:PRIOR_STILL_VIABLEPassed (8)
- MOMENTUM:7.2>=5.5
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:NO_DATE
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
- SECTOR_CONCENTRATION_CAP:sector=Energy:1/10:self_excluded
Failed (1)
- ASYMMETRY:1.1<1.5@spot
Warning (0)
none
Reward-to-Risk
1.11
Upside
+15.7%
Downside
14.1%
Sizing output
STARTER
Setup— — No clear chart pattern; technical signals are mixed
EdgeNo clear edge — No clear edge identified
SuitabilityModerate — Balanced profile
Investment implication
The STRONG_BUY_WAIT verdict reflects the ASYMMETRY gate's 1.1<1.5@spot outcome against Value at 8.0 and asymmetric R:R of 1.11.
The strongest dimensions are Value at 8.0, Momentum at 7.2, and Sentiment at 7.0; the weakest are Growth at 1.6, Technical at 3.2, and Insider at 5.0. The V9 engine flagged 1 failed gate, producing an asymmetric reward-to-risk of 1.11 and an engine sizing output of STARTER.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P168 Pct Margin Of Safety Deep Value
Trip ifAnalyst consensus price target falls below $14 for 2 consecutive months, indicating a downgrade cycle that eliminates the margin of safety thesis.
- P2Earnings Beat Streak With Roe Quality
Trip ifEarnings miss consensus by more than 15% in 2 of the next 4 quarters, reversing the majority-beat pattern.
- P3Oversold Rsi Technical Inflection
Trip ifPrice drops below $13.50 and holds below that level for more than 5 trading days, breaking the technical support floor.
- P4Asymmetry Ratio Favorable
Trip ifRealized risk/reward ratio falls below 1.5 over the next 12 months due to price declining more than 10% from entry without a corresponding analyst target cut.