Is there behind-the-scenes drama going on in the upper echelon of oil stock Petrobras (NYSE:PBR)? Reports suggest that the CEO may be facing ouster outright, and more may be waiting. Yet, among investors, the order of the day is quiet optimism, as shares are up fractionally in Thursday afternoon’s trading.
The new reports from CNN Brasil noted that Jean Paul Prates, the current president of Petrobras, may be about to resign. The reports declare Prates’ departure “imminent” and suggest that a replacement may be waiting in the form of Aloizio Mercadante, president of the BNDES state development bank.
Brazil’s own president, Luiz Inacio Lula da Silva, is set to meet with Prates tomorrow, which will hopefully set up a resolution toward a current situation between Prates and Alexandre Silveria, the current energy minister, which is at loggerheads right now.
Unsettled Everywhere
That’s not all, either. Right now, there’s a lot of change going on inside Petrobras, reports note. First, word came out that the Albacora FPSO, a tender for mid-sized floating production operations, would not be getting its contract renewed with the company, mostly due to high costs. That’s bad enough, but there’s a growing short interest in Petrobras as well, with 60% of recent options trades going bearish against the company. The outlook among investors is getting oddly bearish, and with supplier issues kicking in as well as drama at the top, there may be a reason.
Is Petrobras a Buy or Sell?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on PBR stock based on two Buys and four Holds assigned in the past three months, as indicated by the graphic below. After an 80.17% rally in its share price over the past year, the average PBR price target of $17.68 per share implies 13.04% upside potential.
