Petrobras downgraded to Neutral from Buy at BofA

BofA downgraded Petrobras to Neutral from Buy with a price target of $16, down from $20.20. The company’s decision to not announce extraordinary dividends “heightens the risk perception” at Petrobras and also suggests that the company could be pivoting to an agenda more focused on growth, leading to higher capex and acquisitions, the analyst tells investors in a research note. The firm expects the stock’s valuation to be driven by the company’s total cash return prospects, especially given high yields that are being offered by global peers. BofA cites significantly lower expectations of total cash returns and heightened risk perception for the downgrade.