Petrobras: time to love oil again

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Petrobras: time to love oil again

30 December 2021

What readers said about this report

Oil, gas and coal are the workhorses of the global energy sector and contribute 83% to the world's energy consumption.

You wouldn't think so if you opened your average newspaper. The mainstream media are obsessed with so-called renewable energy. However, based on realistic estimates, oil demand probably won't peak before 2045.

Global oil consumption continues to go up, but with 'woke' leaders punishing European and American oil companies, it'll be a financial bonanza for oil companies from elsewhere. Petrobras is entirely unapologetic about being an oil company, and it's planning record investments to exploit the worsening global demand/supply imbalance.

No one is in favour of polluting the world unnecessarily, which is why the company's so-called "pre-salt" oil reserves are likely to gain a lot of attention. This oil is not just cheap to produce, but it also comes with unusually low carbon emissions. If or when the West returns to a rational energy policy, even so-called "ESG" investors should start to buy the stock.

It's also one of the world's cheapest blue chip stocks. It's trading at a record-low 2.4 times EV/EBITDA multiple, and Petrobras is planning to pay dividends totalling >100% of the share price between 2022 and 2025 alone.

Brazil has its issues, but as my report will show, these issues are a reason to invest (and benefit from improvements) rather than to miss out on this opportunity.

This is a highly liquid stock with listings in New York, Madrid and other global exchanges. It makes for a terrific income investment, and the stock price will have to rise 50-140% just to catch up with the valuation of comparable Russian stocks.

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|  What readers said about this report

Werner S.
January 2022

Thank you very much for this report, which is exactly why I love undervalued shares.

Simon C.
December 2020

Looks like a nice idea.

Urs M.
December 2020

A very good report!

l  Report updates

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30 March 2022

Report Update (PDF - 0.8MB)

11 March 2022

Report Update (PDF - 0.8MB)

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