Petrobras (PBR) Moves 11.5% Higher: Will This Strength Last?
Petrobras PBR shares soared 11.5% in the last trading session to close at $24.14. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 7.6% gain over the past four weeks.
Petrobras shares benefited from investor optimism following the first round of Brazil’s presidential election, in which right-wing Senator Flávio Bolsonaro narrowly led incumbent President Luiz Inácio Lula da Silva, receiving 47.03% of valid votes versus Lula’s 45.16%. The result fueled expectations among investors for a potentially more market-oriented government, greater fiscal discipline and reduced political intervention in state-controlled companies such as Petrobras.
This oil and gas company is expected to post quarterly earnings of $1.21 per share in its upcoming report, which represents a year-over-year change of +47.6%. Revenues are expected to be $31.84 billion, up 35.6% from the year-ago quarter.
Earnings and revenue growth expectations certainly give a good sense of the potential strength in a stock, but empirical research shows that trends in earnings estimate revisions are strongly correlated with near-term stock price movements.
For Petrobras, the consensus EPS estimate for the quarter has been revised 27.4% higher over the last 30 days to the current level. And a positive trend in earnings estimate revision usually translates into price appreciation. So, make sure to keep an eye on PBR going forward to see if this recent jump can turn into more strength down the road.
The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>
Petrobras is part of the Zacks Oil and Gas - Integrated - International industry. Vista Energy, S.A.B. de C.V. - Sponsored ADR VIST, another stock in the same industry, closed the last trading session 3.6% higher at $66.54. VIST has returned -12.9% in the past month.
Vista Energy, S.A.B. de C.V. - Sponsored ADR's consensus EPS estimate for the upcoming report has changed +10.8% over the past month to $2.79. Compared to the company's year-ago EPS, this represents a change of +88.5%. Vista Energy, S.A.B. de C.V. - Sponsored ADR currently boasts a Zacks Rank of #3 (Hold).
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This article originally published on Zacks Investment Research (zacks.com).
