Value
7.5/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 9.8 |
| P/S | 10.0 |
| EV/EBITDA | 10.0 |
| Fwd P/E | 10.0 |
| PEG | 2.8 |
| Analyst target | 5.0 |
- ▸Forward P/E: 4.5x
- ▸PEG: 4.52
- ▸Attractively valued
PBR · Why this verdict
Why Petroleo Brasileiro S.A. Petrob (PBR) 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 score5.6/10
ConfidenceMEDIUM
MacroNEUTRAL
TrendMatrix Research · core thesis
Engine thesis — one sentence
Petrobras offers extreme deep value at a forward P/E of 4.2x with 26% return on equity and an oversold RSI of 21, while analysts project 32% upside — but three consecutive earnings misses and a put/call ratio of 2.65 signal that the market has significant near-term concerns about earnings quality and geopolitical risk.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Petrobras generates a 26% return on equity that ranks superior to peers, combined with 22% net margins, placing it among the most capital-efficient integrated oil companies globally. Peer-rank breakdown | Return on equity stays above 18% for at least 3 of the next 4 quarters, confirming capital efficiency despite commodity price volatility. | ↓Deteriorating |
| CounterHigh ROE in national oil companies is partially a function of subsidized capital costs and government mandates; privatization risk or policy changes could structurally reduce returns below the current level. | ||
With RSI at 21 — deeply oversold — near the Bollinger lower band and rising on-balance volume despite recent price weakness, Petrobras exhibits classic technical conditions that precede mean-reversion bounces in high-quality commodity names. Momentum breakdown | RSI recovers above 35 within 30 days and price holds above the $16.77 stop-loss level, confirming the oversold bounce thesis. | →Stable |
| CounterOversold conditions in Brazilian energy names can persist for extended periods during political uncertainty or commodity price weakness; the put/call ratio of 2.65 indicates options markets are positioning for continued downside beyond the RSI level. | ||
Petrobras trades at a forward P/E of 4.2x with 26% return on equity and 22% margins, providing a margin of safety of 64% that is among the deepest in the energy sector and implies a very low bar for price recovery. Valuation breakdown | Price rises above $19 within 12 months as the forward multiple re-rates toward 5.0x from the current 4.2x. | Tripped→Stable |
| CounterThree consecutive earnings misses averaging 10% below expectations suggest the current earnings base is being revised lower, which would mechanically reduce the intrinsic value even at the same multiple. | ||
Three consecutive earnings misses averaging a negative surprise have reset expectations materially lower; the upcoming quarter provides an opportunity for positive surprise as estimates may now be set below true earnings power. Earnings | Earnings beat consensus by more than 5% in at least 2 of the next 4 quarters as estimates overcorrect to the downside. | →Stable |
| CounterA 23% miss in the most recent quarter is severe and suggests there are structural challenges to earnings delivery — not simply conservatively set estimates — which raises the risk of further misses rather than a rebound. | ||
Petrobras generates a 26% return on equity that ranks superior to peers, combined with 22% net margins, placing it among the most capital-efficient integrated oil companies globally.
↓DeterioratingPeer-rank breakdown
- Expectation
- Return on equity stays above 18% for at least 3 of the next 4 quarters, confirming capital efficiency despite commodity price volatility.
CounterHigh ROE in national oil companies is partially a function of subsidized capital costs and government mandates; privatization risk or policy changes could structurally reduce returns below the current level.
With RSI at 21 — deeply oversold — near the Bollinger lower band and rising on-balance volume despite recent price weakness, Petrobras exhibits classic technical conditions that precede mean-reversion bounces in high-quality commodity names.
→StableMomentum breakdown
- Expectation
- RSI recovers above 35 within 30 days and price holds above the $16.77 stop-loss level, confirming the oversold bounce thesis.
CounterOversold conditions in Brazilian energy names can persist for extended periods during political uncertainty or commodity price weakness; the put/call ratio of 2.65 indicates options markets are positioning for continued downside beyond the RSI level.
Petrobras trades at a forward P/E of 4.2x with 26% return on equity and 22% margins, providing a margin of safety of 64% that is among the deepest in the energy sector and implies a very low bar for price recovery.
Tripped→StableValuation breakdown
- Expectation
- Price rises above $19 within 12 months as the forward multiple re-rates toward 5.0x from the current 4.2x.
CounterThree consecutive earnings misses averaging 10% below expectations suggest the current earnings base is being revised lower, which would mechanically reduce the intrinsic value even at the same multiple.
Three consecutive earnings misses averaging a negative surprise have reset expectations materially lower; the upcoming quarter provides an opportunity for positive surprise as estimates may now be set below true earnings power.
→StableEarnings
- Expectation
- Earnings beat consensus by more than 5% in at least 2 of the next 4 quarters as estimates overcorrect to the downside.
CounterA 23% miss in the most recent quarter is severe and suggests there are structural challenges to earnings delivery — not simply conservatively set estimates — which raises the risk of further misses rather than a rebound.
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 | 5.0 |
| MACD | 9.3 |
| OBV | 10.0 |
| MA position | 9.0 |
| Volume | 2.9 |
- ▸Volume accumulation (rising OBV)
- ▸Above 200-day MA
Sentiment
6.7/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 7.2 |
| Price target | 7.5 |
| erm sentiment | 5.0 |
Insider
7.3/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 10.0 |
| notable moves | 7.0 |
- ▸No net insider activity — $0 (0.000% of mkt cap)
- ▸Institutions accumulating
Peer rank
5.0/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 7.8 |
| quality rank | 7.6 |
| growth rank | 2.4 |
- ▸Attractive P/E vs peers
- ▸Superior ROE vs peers
Technical
3.1/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 1.4 |
| support resistance | 0.5 |
| 52w position | 7.3 |
Risk (lower is worse)
4.9/10data confidence 100%| Component | Sub-score |
|---|---|
| days to cover | 8.1 |
| volatility | 5.8 |
| put call | 0.0 |
| implied vol | 4.4 |
| debt equity | 6.0 |
- ▸Elevated put/call: 3.04
Catalyst
3.8/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 0.0 |
| earnings timing | 5.0 |
| surprise avg | 2.8 |
| dividend safety | 6.2 |
- ▸Earnings concerns: 1B/3M
- ▸Earnings in 7 days
- ▸Dividend: 9.8%
How the verdict was assembled
Engine trigger
Multiple concerning factors. Consider reducing position.
Engine technical detail
verdict_path:
L4:PATH_F_SELLPassed (6)
- MOMENTUM:7.2>=5.5
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (2)
- ASYMMETRY:0.2<1.5@spot
- EARNINGS_PROXIMITY:7d<=7d
Warning (0)
none
Reward-to-Risk
0.18
Upside
+2.7%
Downside
15.0%
Sizing output
AVOID
SetupBreakout — Golden cross, above all MAs, RSI 69, MACD bullish
EdgeNo clear edge — No clear edge identified
SuitabilityModerate — Balanced profile
Investment implication
The F-path SELL output reflects an overall score of 5.6 below the 5.6 soft trigger — multiple weakening dimensions accumulated rather than a single hard-floor breach. The strongest dimension ( Value at 7.5) was not enough to lift the adjusted overall above the threshold. Co-occurring failed gates ( ASYMMETRY:0.2<1.5@spot, EARNINGS_PROXIMITY:7d<=7d) reinforce the read. Current asymmetry R:R is 0.18 — supplementary context, not the trigger for this path.
The strongest dimensions are Value at 7.5, Insider at 7.3, and Momentum at 7.2; the weakest are Growth at 1.6, Technical at 3.1, and Catalyst at 3.8. The V9 engine flagged 2 failed gates, producing an asymmetric reward-to-risk of 0.18 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Extreme Deep Value Forward PeTripped
Trip ifForward P/E rises above 7.0x without a corresponding increase in analyst price targets, indicating multiple expansion is already priced in.
- P2Oversold Rsi Technical Inflection
Trip ifPrice drops below $15.00 and holds below that level for more than 10 trading days, confirming the oversold bounce failed.
- P3Roe Peer Advantage
Trip ifReturn on equity falls below 15% for 2 consecutive quarters, indicating structural erosion of capital efficiency.
- P4Earnings Miss Streak Headwind
Trip ifEarnings miss consensus by more than 10% for a 4th consecutive quarter, extending the miss streak and invalidating the low-expectations thesis.