Core Viewpoint - Petrobras (PBR) has received an upgrade to a Zacks Rank 1 (Strong Buy) due to an upward trend in earnings estimates, which is a significant factor influencing stock prices [1][3]. Earnings Estimates and Stock Price Movement - The Zacks rating system is based on changes in earnings estimates, which are closely correlated with near-term stock price movements [4][6]. - Institutional investors often rely on earnings estimates to determine the fair value of stocks, leading to buying or selling actions that affect stock prices [4]. Petrobras Earnings Outlook - Petrobras is projected to earn $2.90 per share for the fiscal year ending December 2025, indicating no year-over-year change [8]. - Over the past three months, the Zacks Consensus Estimate for Petrobras has increased by 5.4%, reflecting a positive outlook for the company's earnings [8]. Zacks Rank System - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with Zacks Rank 1 stocks historically generating an average annual return of +25% since 1988 [7]. - The upgrade of Petrobras to Zacks Rank 1 places it in the top 5% of Zacks-covered stocks, suggesting potential for higher stock prices in the near term [10].

Core Viewpoint - The article discusses the reliability of brokerage recommendations, particularly focusing on Petrobras (PBR), and suggests that while the average brokerage recommendation (ABR) indicates a positive outlook, investors should validate this information with other analytical tools like the Zacks Rank [1][5][10]. Brokerage Recommendation Summary - Petrobras has an average brokerage recommendation (ABR) of 1.83, which is between Strong Buy and Buy, based on recommendations from nine brokerage firms [2][5]. - Out of the nine recommendations, five are classified as Strong Buy, accounting for 55.6% of the total recommendations [2]. Zacks Rank Comparison - The Zacks Rank, which is a proprietary stock rating tool, is based on earnings estimate revisions and is considered a more reliable indicator of near-term price performance compared to ABR [8][11]. - The Zacks Rank is displayed in whole numbers (1 to 5) and is updated more frequently than the ABR, which may not always reflect the most current information [9][12]. Earnings Estimate Insights - The Zacks Consensus Estimate for Petrobras has increased by 6.7% over the past month to $2.9, indicating growing optimism among analysts regarding the company's earnings prospects [13]. - The recent change in the consensus estimate, along with other factors, has led to a Zacks Rank of 1 (Strong Buy) for Petrobras, suggesting a strong potential for price appreciation [14].

Petrobras Chairman Pietro Mendes is stepping down from the crude producer following his approval by the Brazilian Senate to become a director at Brazil’s oil and gas regulator, known as ANP https://t.co/qVWx9A3i0i ...

Core Insights - Petrobras has raised concerns regarding Brazil's upcoming change in the reference oil price, which could negatively impact the economic viability of offshore post-salt fields and onshore projects [1][4] - The new benchmark, approved by the oil regulator ANP, is expected to increase taxes and royalties, potentially boosting government revenues by an additional 1 billion reais ($184 million) by year-end [2][8] - The oil industry, particularly Petrobras, fears that the new rules may discourage investments in less profitable post-salt and onshore fields, which could hinder future exploration and development [3][4] Impact on Brazil's Energy Landscape - The government anticipates that the adjustment in oil pricing will raise taxes and royalties, benefiting fiscal goals but potentially increasing the tax burden on operators like Petrobras [2][3] - The new reference price will treat both pre-salt and post-salt production similarly for fiscal calculations, despite the lower profitability of post-salt fields [2][3] Industry Pushback and What's at Stake - The oil industry has expressed concerns that higher government receipts from the new rules may come at the cost of capital needed for future projects, impacting investment in non-pre-salt fields [3][4] - Brazil's refining sector supports the change, arguing it will create a more balanced market for domestic sales and exports [3] Balancing Revenues and Viability - Petrobras emphasizes the importance of ensuring the economic feasibility of oil production, highlighting the challenge Brazil faces in balancing government revenue needs with the sustainability of its energy sector [4]

Key Takeaways Petrobras plans a strategic re-entry into ethanol, with a growing focus on corn over sugarcane.Corn ethanol gains appeal from lower costs, higher yields and rising output in Brazil's north.Petrobras eyes minority stakes in corn ethanol ventures, while denying investment in Raizen.Petrobras (PBR) , Brazil’s state-run integrated oil and gas company, is signaling a bold shift in its ethanol strategy. According to Reuters, the company is increasingly favoring corn-based ethanol over the traditiona ...

Core Insights - Petrobras (PBR) reported second-quarter earnings per ADS of 64 cents, missing the Zacks Consensus Estimate of 70 cents due to lower downstream production and a decline in realized oil prices [1][10] - Consolidated net income was $4,101 million, down from $5,394 million a year earlier, while adjusted EBITDA fell to $9,242 million from $9,627 million [2] - Revenues for the quarter totaled $21,037 million, a 10.4% decrease from $23,467 million year-over-year, slightly missing the Zacks Consensus Estimate of $21,040 million [2] Upstream Segment - Average oil and gas production reached 2,909 thousand barrels of oil equivalent per day (MBOE/d), an increase from 2,699 MBOE/d in the same period of 2024 [4] - Brazilian oil and natural gas production improved by 8.1% to 2,879 MBOE/d, driven by ramp-up of existing fields and the startup of FPSO Alexandre de Gusmao [4] - The average sales price of oil fell over 20% year-over-year to $67.82 per barrel, negatively impacting upstream unit sales and revenues, which declined to $14,404 million from $15,668 million [5] - The upstream segment recorded a net income of $3,974 million, down 24.1% from $5,237 million in the second quarter of 2024 due to increased pre-salt lifting costs [6] Downstream Segment - Revenues from the downstream segment totaled $19,795 million, a 10.3% decrease from $22,061 million year-over-year, attributed to lower production volumes [7] - The downstream unit's profit fell to $217 million from $279 million in the second quarter of 2024, impacted by higher operating costs [7] Costs and Financial Position - Sales, general and administrative expenses were $1,750 million, a 3.7% decrease from the previous year, while selling expenses rose to $1,286 million [8] - Total operating expenses decreased by 7.2%, but the decline in revenues led to a drop in operating income to $5,349 million from $6,705 million year-over-year [8] - Capital investments totaled $4,431 million, up from $3,393 million in the prior-year quarter, with positive free cash flow of $3,445 million, down from $6,148 million [11] - Net debt increased to $58,563 million from $46,160 million a year ago, with cash and cash equivalents at $6,996 million [12]

Key Takeaways Zacks Rank & Key Picks BP and PBR currently carry a Zack Rank #3 (Hold). Investors interested in the energy sector may look at a couple of better-ranked stocks like Antero Midstream Corporation (AM) and Enbridge Inc. (ENB) , each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. BP plc (BP) is exploring the possibility of partnering with Petróleo Brasileiro S.A. – Petrobras (PBR) to develop its Bumerangue oil and gas dis ...

Analyst's Disclosure:I/we have a beneficial long position in the shares of PBR either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any inv ...

Oil Production and Exploration - Brazil, a major oil producer, surpasses the United Arab Emirates in oil production [1] - Brazil's oil boom is projected to peak in the next few years, with production declining from the early 2030s [1] - Petrobras plans a major offshore exploration campaign near the Amazon [1] Global Oil Demand and Supply - The world needs to discover more oil to ensure stable supplies during the transition to cleaner fuels [2] - Even with declining global demand from the 2030s, the world will require 18 million barrels per day in 2040, exceeding current US production levels [2] - Consultancy Ricead Energy projects a global demand of 18 million barrels per day in 2040 [2] Location Context - The exploration campaign is planned near Berlin, a city of 1.3 million people, located near the Amazon [1]

Financial Data and Key Metrics Changes - In Q2 2025, Petrobras reported a net income of $4.1 billion and EBITDA of $10.2 billion, both excluding one-off events, which are consistent with the previous quarter despite a 10% decline in Brent prices [11][12] - Operating cash flow decreased to $7.5 billion compared to the previous quarter, primarily due to known events such as tax credits and higher selling expenses related to increased crude oil export volumes [13][14] - The company maintained a financial debt level under control, with over 60% of total indebtedness related to leases of platforms, vessels, and rigs [14][15] Business Line Data and Key Metrics Changes - Petrobras increased its gas supply to the market by 15%, mainly due to the progress of the Route 3 pipeline and the Bua Ventura gas processing unit [2][10] - Total production reached a record of 4.2 million barrels of oil equivalent per day, with a 5% increase in production volume in Q2 [10][12] - The company achieved a midpoint of its 2025 production target of 2.3 million barrels per day in the first half of the year [8] Market Data and Key Metrics Changes - Brent prices fell by 10% quarter-over-quarter, impacting revenue, but increased production helped mitigate the effects on financial results [8][12] - The company expects average oil and gas production in 2025 to be at the upper end of the target range, with a potential additional revenue of $2.5 billion at a price of $70 per barrel [21] Company Strategy and Development Direction - Petrobras is focused on increasing production efficiency and reducing costs in response to the challenging geopolitical environment and fluctuating oil prices [4][5] - The company aims to optimize its projects and maintain a strong commitment to generating value for investors and Brazilian society [6][22] - Future projects will be evaluated based on profitability and alignment with the company's strategic goals, ensuring capital discipline [49][52] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenges posed by falling oil prices but emphasized the company's ability to adapt through increased production and cost reductions [4][5] - The management expressed confidence in achieving production targets and maintaining financial robustness despite external pressures [22][83] - The company is committed to complying with all contracts and ensuring profitable projects are prioritized [83][85] Other Important Information - Petrobras plans to distribute 45% of its free cash flow from Q2, amounting to 8.7 billion Brazilian reals, to shareholders in two equal installments [22][23] - The company has successfully executed a public offering of debentures totaling 3 billion Brazilian reals, allowing for competitive funding in the local market [15] Q&A Session Summary Question: What advancements can be expected in natural gas distribution and how does it integrate with the business plan? - Petrobras is focused on increasing gas production and exploring synergies, but currently has no projects to acquire LNG [25][26] Question: Can you discuss the risk factors that lead to a more conservative production curve? - Management highlighted the importance of connecting fields to maximize production and acknowledged the impact of scheduled shutdowns on output [35][38] Question: What is the flexibility regarding CapEx in light of lower oil prices? - The company will reassess projects based on profitability and may postpone or optimize projects as needed, while maintaining its CapEx guidance for the year [72][75] Question: How does Petrobras plan to handle potential movements in the ethanol sector and pre-salt layer auctions? - Petrobras will participate in pre-salt layer auctions if economically viable, while also focusing on renewable fuels and energy transition projects [69][70] Question: Can you clarify the partnership with Accent and its synergies with Guyana and Suriname? - The partnership with Accent is aimed at sharing risks and knowledge, leveraging similarities in the operational environment [64]