PBR changes
Pick any two versions below to diff them.
- Price
- $18.35
- Discount category
- Close to intrinsic value
- Next earnings
- 2026-11-10
- Next earnings is estimate
- No
- Company name
- Petrobras
- Sector
- Integrated oil & gas
- About
- Petrobras (Petróleo Brasileiro S.A.) is Brazil's state-controlled oil and gas company. It produces oil and gas, mostly from the pre-salt layer in deep waters off Brazil, such as the Búzios, Tupi and Mero fields. It also refines crude oil, sells fuels in Brazil and has gas and power businesses. Its own production was a record 3.51 million barrels of oil equivalent per day in Q3 2026. The Brazilian federal government is its controlling shareholder. The PBR American depositary share (ADS) equals two common shares, and the PBR.A ADS equals two preferred shares. It reports to the SEC in U.S. dollars.
- Thesis
- The market prices Petrobras for the risk that the Brazilian government, its controlling shareholder, uses the company for policy goals. In 2026, Petrobras joined government programs that subsidize diesel and gasoline prices, it paid new export taxes on crude oil and diesel, and its Chairman left the board in March 2026 to become a minister. Investors also fear that the investment of $109 billion in the 2026-2030 Business Plan will reduce dividends. The operations are strong: own production reached a record in Q3 2026, and pre-salt lifting cost was $4.45 per barrel of oil equivalent in Q2 2026. For the gap to close, three things must be true. The company must keep paying 45% of free cash flow to shareholders under its policy. Fuel prices in Brazil must stay near international prices, with the government, not Petrobras, paying for the subsidies. Net debt must stay near 1.14 times adjusted EBITDA, the Q2 2026 level, while new Búzios platforms raise production in 2027. The Q3 2026 report on November 10, 2026 and the 2027-2031 Business Plan, expected in late November 2026, give the next tests. A new federal government term starts on January 1, 2027, and its choices for the board and fuel prices are the main test after that. Part of the gap will probably stay, because the state controls the company.
- Risks
- The federal government controls Petrobras and nominates candidates for its board. In 2026, Petrobras joined fuel subsidy programs and paid new export taxes of $1.09 billion in the first half. A new government term starts on January 1, 2027, and it can change fuel price policy, investment or dividends. Results depend on oil prices. Brent averaged $104.52 per barrel in Q2 2026 and $67.82 in Q2 2025, and net income excluding one-off events rose to $11.1 billion from $4.1 billion. Lower prices would cut cash flow and dividends. Gross debt was $70.8 billion at June 30, 2026, of which $45.0 billion was finance leases, mainly for chartered platforms. The 2026-2030 Business Plan needs $109 billion of investment, which can limit free cash flow. Subsidy payments from the government come with a delay. In Q2 2026, receivables from the fuel subsidy program took $1.9 billion of operating cash flow. Many costs and taxes are in Brazilian reais. A stronger real raises costs per barrel in U.S. dollars, as in Q2 2026.
- Balance sheet
- Cash: $10.4B Debt: $70.8B Net debt: $60.4B Net debt / EBITDA: 1.1× (low) Petrobras funds itself with bonds, bank loans, export credit and finance leases for platforms. Gross debt was $70.81 billion at June 30, 2026, of which $25.83 billion was financial debt and $44.97 billion was finance leases. Adjusted cash and cash equivalents were $10.42 billion, so net debt was $60.39 billion. Net debt was 1.14 times adjusted EBITDA of the last 12 months, as the company reports it, down from 1.43 times at March 31, 2026. The average interest rate was 6.8% a year and the average maturity was 11.9 years. In Q2 2026, Petrobras repaid $2.9 billion of loans and bonds and raised $0.6 billion. Free cash flow was $7.7 billion in Q2 2026. Petrobras reports Q3 2026 figures on November 10, 2026. As of 2026-06-30.
- Checkpoints
- Nov 10, 2026: Q3 2026 results: cash and dividends. Pending. Watch: Free cash flow near the Q2 2026 level and a dividend of 45% of free cash flow pass; a lower payout or large subsidy-related costs fail. Nov 2026 (estimate): 2027-2031 Business Plan. Pending. Watch: Investment near the $109 billion of the last plan and a confirmed dividend policy pass; much higher investment or a weaker dividend policy fail.
- Recent events
- 2026-11-04: Fitch upgraded the Standalone Credit Profile of Petrobras to 'bbb+' from 'bbb'. Petrobras said that this was the first upgrade of this profile by Fitch since 2020. 2026-10-29: Petrobras found another oil-bearing interval in the Morpho well, the third discovery in block FZA-M-59 in ultra-deep waters off the coast of Amapá. 2026-10-28: Petrobras reported record Q3 2026 production of 3.512 million barrels of oil equivalent per day, 11.7% more than a year earlier, from the P-78 and P-79 platforms and higher efficiency. The P-80 and P-82 platforms left Singapore for the Búzios field and will start production in 2027. 2026-09-19: The board approved joining a new federal subsidy program for diesel producers and importers of R$1.00 per liter for 30 days. This program adds to the R$1.12 per liter diesel subsidy that Petrobras already receives. 2026-08-06: Petrobras reported Q2 2026 results. Adjusted EBITDA excluding one-off events was $20.0 billion, net income excluding one-off events was $11.1 billion and free cash flow was $7.7 billion, with Brent at $104.52 per barrel. The board approved R$17.4 billion of shareholder remuneration, or R$1.348 per share, paid in November and December 2026. 2026-05-01: The P-79 platform (Búzios 8) started production ahead of schedule. It can produce 180,000 barrels of oil per day. 2026-03-31: Board Chairman Bruno Moretti resigned after his appointment as Brazil's Minister of Planning and Budget. On April 6, 2026, the board elected Marcelo Weick Pogliese as Chairman. 2026-03-12: The board approved joining the federal subsidy program for road diesel created by Provisional Measure No. 1,340. Petrobras said that it keeps its commercial strategy and avoids passing short-term swings in international prices to domestic prices. 2025-11-27: The board approved the 2026-2030 Business Plan, with total investment of $109 billion. Of this amount, $91 billion is for projects in implementation and $18 billion is for projects under evaluation.