It's time to buy Petrobras on the strength of its dividend potential, Morgan Stanley said Wednesday. Analyst Bruno Montanari upgraded the Brazilian energy giant to overweight from equal weight and hiked his price target. "PBR has been a strong performer YTD, but we see further room for capital appreciation," Montanari wrote. "And the potential total return — 51% after a ~16% dividend yield — looks compelling enough to us to justify a more positive stance on the stock in 2023.
50, suggests the stock has 30% upside from Tuesday's closing price of $12.65. That bullish outlook is driven by "far less disruptive" policy changes from the government than the analyst was previously expecting, as well as lower oil prices that only bolstered the case for Petrobras. Montanari expects the firm will generate generous dividends for investors going forward.
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