The surge of 122% of the net profit gives PetroRio (PRIOR3), at the second trimesterreinforced the confidence of the bank of america (BofA) in the shares of oil company. The bank reaffirmed its buy recommendation for the papers, with a target price of R$35.50.
The figure represents a potential increase of 52.3% over the BRL 23.31 with which the company closed this Thursday (4th) trading session on B3. “PetroRio remains one of our favorites (top stocks) in the oil and gas of Latin America”, say Frank McGann and Leonardo Marcondes, who signed the BofA report.
According to analysts, there are four factors that support optimism with the paper, both in the short and long term. The first is short-term earnings growth, driven by higher oil prices, operational improvements in newly purchased fields and new wells in Octopus and Friar.
The second factor is the start of the operation in the Wahoo Fieldconsidered one of the most strategic projects for the company in the long term, in terms of generating value for shareholders.
The third point that justifies BofA’s good mood is the bet that the company will make new acquisitions. “We still believe that PetroRio has an interesting addressable market in terms of M&A”, say the analysts.
Finally, the duo is also betting on further reductions in the oil company’s operating costs. “We expect a sharp drop in extraction costs in 3Q22, due to the start-up of two new wells that are part of Frade’s revitalization plan,” says the bank.
PetroRio profits US$ 139.9 million
PetroRio, or PRIO, as it came to be called, saw its net income jump 112% in the second quarter of the year compared to the same period in 2021, according to the report released this Wednesday (3).
The amount, excluding IFRS-16, totaled US$139.9 million, compared to gains of US$66 million reported a year earlier. PetroRio stated that the result was strongly impacted by the increase in income tax, which in turn is impacted by the increase in revenue.
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