Stocks Fall Again, and Petrobras Loses R$ 47.1 Billion in Market Value in Two Days

Goldman Sachs announced today a reduction in the target price of the company's ADRs from $18.80 to $18.10.

Ignacio Teson•Friday, May 17, 2024•1 min read

Risk Perception Remains Amid Leadership Change at Brazilian State-Owned Company.

After falling more than 6% yesterday following the change in company leadership, Petrobras shares continued to decline on Thursday (16th). The preferred shares (PETR4) ended the session down 2.84% at R$37.31, and the common shares fell 1.82% to R$39.29. Meanwhile, the Ibovespa index closed the session up 0.20% at 128,283.62 points.

As a result, the state-owned company lost R$47.1 billion in market value over the past two trading days—R$35.5 billion yesterday and R$11.6 billion today.

The dismissal of Jean Paul Prates as CEO of Petrobras and the appointment of Magda Chambriard to the position increased local risk perception yesterday, causing the company’s shares to drop significantly. Local assets as a whole diverged from international markets, which experienced gains after U.S. inflation data came in lower than expected.

Some fund managers have expressed the opinion that the company’s governance and the State-Owned Enterprises Law would make significant changes within the company challenging. They also highlighted that on other recent occasions when there were disruptions, the shares managed to recover after some time.

Goldman Sachs announced today a reduction in the target price of the company’s ADRs from $18.80 to $18.10, with a potential upside of 16.3% from yesterday’s closing price. The American bank reiterated its buy recommendation.

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ABOUT THE AUTHOR See More

Ignacio Teson

Economist and Financial Analyst

Ignacio Teson is an Economist and Financial Analyst. He has more than 7 years of experience in emerging markets. He worked as an analyst and market operator at brokerage firms in Argentina and Spain.