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Are Investors Undervaluing Petrobras (PBR) Right Now?

Zacks Equity Research
MidWestOne (MOFG) doesn't possess the right combination of the two key ingredients for a likely earnings beat in its upcoming report. Get prepared with the key expectations.

Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.

Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.

Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.

One stock to keep an eye on is Petrobras (PBR). PBR is currently sporting a Zacks Rank of #2 (Buy) and an A for Value.

We should also highlight that PBR has a P/B ratio of 1.45. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. This stock's P/B looks solid versus its industry's average P/B of 1.97. Over the past 12 months, PBR's P/B has been as high as 1.50 and as low as 0.72, with a median of 1.13.

Finally, investors should note that PBR has a P/CF ratio of 5.52. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. PBR's current P/CF looks attractive when compared to its industry's average P/CF of 7.92. PBR's P/CF has been as high as 8.03 and as low as 3.99, with a median of 5.26, all within the past year.

These are only a few of the key metrics included in Petrobras's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, PBR looks like an impressive value stock at the moment.


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Petroleo Brasileiro S.A.- Petrobras (PBR) : Free Stock Analysis Report
 
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