Braskem SA (BAK) AI Stock Analysis

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Braskem SA

(NYSE:BAK)

Rating:46Neutral

Price Target:

$3.50

▼(-3.31%Downside)

Braskem SA's overall stock score reflects significant financial challenges, primarily due to declining revenues, high leverage, and ongoing profitability issues. Improvements in operational performance and strategic initiatives offer some positive outlook, but the high debt levels and sector challenges continue to weigh heavily on the company's prospects.

Positive Factors

Debt Management

Liability management is not a big issue at least in the short-term, given that the company has a long debt profile with 65% maturing from 2030 onwards.

Leadership

Mr. Jens has vast experience including roles as a Board Member, CEO, CFO, CIO and Managing Director in different sectors, including infrastructure and petrochemicals.

Negative Factors

Financial Performance

Braskem's EBITDA is expected to be well below its mid-cycle level over the next years.

Geological Event

The Alagoas geological event remains one of the main risks in Braskem’s investment thesis and the company itself does not discard further provisions related to this matter.

Petrochemical Spreads

The outlook for petrochemical spreads will remain challenging given the weak current demand scenario and the strong capacity addition expected to come online in China.

Braskem SA (BAK) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$1.58B

Dividend YieldN/A

Average Volume (3M)935.90K

Price to Earnings (P/E)―

Beta (1Y)1.04

Revenue Growth0.81%

EPS Growth-34.74%

CountryUS

Employees8,569

SectorBasic Materials

Sector Strength67

IndustryChemicals

Share Statistics

EPS (TTM)0.29

Shares Outstanding172,530,200

10 Day Avg. Volume751,495

30 Day Avg. Volume935,900

Financial Highlights & Ratios

PEG Ratio0.22

Price to Book (P/B)2.65

Price to Sales (P/S)0.00

P/FCF Ratio4.72

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$4.75

Price Target Upside31.22% Upside

Rating ConsensusHold

Number of Analyst Covering2

Braskem SA Business Overview & Revenue Model

Company DescriptionBraskem SA (BAK) is a leading petrochemical company based in Brazil, operating primarily in the chemical and plastics industry. The company is the largest producer of thermoplastic resins in the Americas and a significant player in the global market. Braskem's core products include a wide range of polyolefins, such as polyethylene and polypropylene, as well as other chemicals like vinyls and basic petrochemicals. The company serves various sectors, including automotive, packaging, and construction, providing essential materials for manufacturing and industrial applications.

How the Company Makes MoneyBraskem SA generates revenue primarily through the production and sale of chemical and plastic products. The company's revenue model is centered around its extensive portfolio of polyolefins, vinyls, and basic petrochemicals, which are sold to manufacturers and industrial clients worldwide. Key revenue streams include the sale of polyethylene and polypropylene, which are used in packaging, automotive components, and consumer goods. Braskem also benefits from strategic partnerships and joint ventures that enhance its production capabilities and market reach. Additionally, the company's focus on innovation and sustainability initiatives helps maintain competitive advantages and meet evolving customer demands, contributing to its earnings.

Braskem SA Earnings Call Summary

Earnings Call Date:May 09, 2025

(Q1-2025)

% Change Since: -8.35%|

Next Earnings Date:Aug 06, 2025

Earnings Call Sentiment Neutral

Braskem's earnings call for Q1 2025 highlighted improved operational performance and significant EBITDA growth, alongside strategic initiatives such as the launch of the ethane import terminal in Mexico and increased green ethylene capacity. However, challenges remain with high corporate leverage, negative working capital impacts, and continued struggles in the US and Europe PP segments amid a prolonged petrochemical downturn.

Q1-2025 Updates

Positive Updates

Improved Operational Performance

Braskem's petrochemical plants showed a higher utilization rate in Q1 2025 compared to Q4 2024, with a global accident frequency rate of 0.92, aligning with top market standards.

Significant EBITDA Growth

Consolidated recurring EBITDA increased by 121% from Q4 2024, reaching $224 million, driven by higher spreads of PE and chemicals in the international market and increased sales of PP in the US and Europe.

Strong Cash Position

Braskem ended Q1 2025 with a cash position of $2 billion, covering debt maturities for the next 33 months, excluding the $1 billion revolving credit line available until December 2026.

Green Ethylene Capacity Increase

The green ethylene capacity at Triunfo was revised to 270,000 tons per year, exceeding previous forecasts due to successful industrial tests.

Launch of Ethane Import Terminal in Mexico

Braskem Idesa inaugurated an ethane import terminal with a capacity to receive and store 54,000 tons and transport 80,000 barrels of ethane per day, enhancing operational capability in the region.

Negative Updates

High Corporate Leverage

Corporate leverage stood at 7.92 times at the end of Q1 2025, indicating a significant challenge in managing debt levels.

Negative Working Capital Impact

Operating cash consumption of approximately BRL 936 million was primarily due to negative variations in working capital, driven by inventory management amid scheduled shutdowns.

Challenges in Europe and US PP Segment

The US and Europe segment faced challenges due to low PP margins, exacerbated by planned and unplanned shutdowns of propylene suppliers.

Prolonged Petrochemical Downturn

The company anticipates ongoing challenges due to international market shutdowns and new tariff scenarios, affecting resin spreads and overall market conditions.

Company Guidance

In the first quarter of 2025, Braskem achieved a consolidated recurring EBITDA of $224 million, marking a 121% increase from the previous quarter, with a net profit of $113 million attributable to shareholders. The company's global accident frequency rate stood at 0.92 events per million hours worked, maintaining high operational safety. The Brazil segment saw a 4-percentage point rise in the average utilization rate, leading to a recurring EBITDA of $199 million, a 101% increase. In the United States and Europe, the utilization rate increased by 13 percentage points, resulting in a recurring EBITDA of $20 million. Mexico reported a recurring EBITDA of $37 million, up by 6% from the previous quarter. Braskem's cash position at the end of Q1 was $2 billion, sufficient to cover debt maturities over the next 33 months, excluding a $1 billion revolving credit line maturing in December 2026. The company's corporate leverage was at 7.92 times, with 68% of corporate debt maturing from 2030, reflecting a long-term debt profile.

Braskem SA Financial Statement Overview

Summary

Braskem SA faces significant financial challenges, with declining profitability, high leverage, and cash flow issues. Negative equity and substantial debt levels pose risks, while recent revenue declines and net losses compound the company's financial instability.

Income Statement

Negative

Braskem SA has seen a decline in total revenue from 2021 to 2024, with significant net losses reported in recent years. The Gross Profit Margin has decreased, reflecting pressure on profitability. The EBIT and EBITDA margins have also weakened, indicating operational challenges.

Balance Sheet

Negative

The balance sheet shows negative stockholders' equity as of 2024, indicating financial instability. The debt-to-equity ratio is not calculable due to negative equity, highlighting high leverage. The company has a substantial total debt, increasing financial risk. ROE is not meaningful with negative equity.

Cash Flow

Neutral

Braskem SA's cash flow situation is concerning, with negative free cash flow reported for the past two years. Operating cash flow has improved since 2023 but remains weak compared to historical levels. The free cash flow to net income ratio is negative, indicating cash flow challenges.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
77.41B	70.57B	96.52B	105.63B	58.54B
	Gross Profit
6.00B	3.02B	11.36B	32.06B	11.21B
	EBIT
1.01B	-1.83B	4.27B	26.04B	-228.36M
	EBITDA
2.70B	3.80B	8.84B	27.28B	-1.65B
	Net Income Common Stockholders
-11.32B	-4.58B	-820.00M	13.98B	-7.02B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
16.77B	19.14B	14.76B	11.34B	16.17B
	Total Assets
101.58B	91.74B	88.05B	92.56B	86.08B
	Total Debt
73.72B	59.91B	52.78B	53.53B	59.56B
	Net Debt
58.74B	45.72B	40.32B	44.85B	45.70B
	Total Liabilities
105.85B	88.46B	81.94B	86.36B	89.95B
	Stockholders Equity
-4.78B	3.99B	7.32B	7.87B	-2.20B
Cash Flow		Free Cash Flow
-1.33B	-6.80B	4.10B	11.37B	3.53B
	Operating Cash Flow
2.44B	-2.27B	8.95B	14.79B	6.29B
	Investing Cash Flow
-3.48B	-4.53B	-4.95B	-3.38B	-2.72B
	Financing Cash Flow
469.00M	8.87B	225.00M	-16.97B	2.17B

Braskem SA Technical Analysis

Technical Analysis Sentiment

Negative

Last Price3.62

Price Trends

50DMA

3.68

Negative

100DMA

3.88

Negative

200DMA

4.74

Negative

Market Momentum

MACD

-0.01

Positive

RSI

45.91

Neutral

STOCH

46.24

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For BAK, the sentiment is Negative. The current price of 3.62 is below the 20-day moving average (MA) of 3.75, below the 50-day MA of 3.68, and below the 200-day MA of 4.74, indicating a bearish trend. The MACD of -0.01 indicates Positive momentum. The RSI at 45.91 is Neutral, neither overbought nor oversold. The STOCH value of 46.24 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for BAK.

Braskem SA Risk Analysis

Braskem SA disclosed 74 risk factors in its most recent earnings report. Braskem SA reported the most risks in the "Finance & Corporate" category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

Braskem SA Peers Comparison

Overall Rating

UnderperformOutperform

Sector (51)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
WLKP	72 Outperform	$779.48M	14.84	10.22%	8.54%	-6.76%	-3.19%
DOW	69 Neutral	$21.61B	76.41	1.60%	9.16%	-2.08%	-76.11%
TROX	56 Neutral	$885.81M	―	-8.44%	9.11%	4.15%	57.25%
CE	53 Neutral	$6.15B	6.84	-26.94%	0.21%	-5.98%	-183.27%
Sector *	51 Neutral	$2.01B	-1.26	-21.11%	4.38%	2.92%	-30.46%
BAK	46 Neutral	$1.58B	―	-8638.28%	―	0.81%	-34.74%
HUN	46 Neutral	$1.88B	―	-4.46%	9.46%	0.02%	-43.65%

* Basic Materials Sector Average

Performance Comparison

BAK

Braskem SA

3.62

-2.98

-45.15%

Celanese

54.39

-82.04

-60.13%

HUN

Huntsman

10.45

-11.43

-52.24%

TROX

TRONOX

5.50

-11.66

-67.95%

WLKP

Westlake Chemical PRN

22.07

1.63

7.97%

DOW

Dow Inc

28.50

-21.95

-43.51%

Glossary

BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.