March 9 (Bloomberg) -- Petroleo Brasileiro SA’s voting shares were lowered at JPMorgan Chase & Co., which cited the Brazilian state-controlled energy producer’s 15 percent rally since the start of the year and a lack of “positive catalysts.”

The common stock was cut to “neutral” from “overweight” by JPMorgan analysts Lilyanna Yang and Sergio Torres. They maintained their “overweight” recommendation on its preference shares, which have gained 12 percent during the same period.

“The stock’s recent outperformance was partly explained by Petrobras’ capital expenditure flexibility and high refining margins versus global peers,” the analysts wrote in a report. “Nevertheless, we see no bold positive catalysts going forward to justify further outperformance.”

Petrobras’ voting shares fell for a third day, losing 1 percent to 31.20 reais at 9:16 a.m. New York time in Sao Paulo. The preferred shares declined 1.1 percent to 25.38 reais.

Petrobras said March 7 that fourth-quarter profit rose a more-than-forecast 46 percent as a weaker Brazilian real boosted the value of its dollar assets and helped cushion a drop in the price of oil.

Citigroup Inc. said Petrobras’ sales were “artificially increased” by using year-end exchange rates and expenses had jumped. Morgan Stanley said in report it may further revise its earnings estimates because of “poor operating performance in the fourth quarter.”

“We were disappointed by Petrobras’ fourth-quarter results and expect the shares to react negatively,” Citigroup analysts led by Tereza Mello wrote in a report dated yesterday.

Reiterated ‘Buy’

Deutsche Bank AG and Banco Santander SA reiterated Petrobras at “buy” in separate notes distributed today. While fourth- quarter earnings missed estimates, the prospect of higher production and lower taxes probably will help offset lower oil prices, Deutsche’s Marcus Sequeira wrote.

“Going forward, we expect that the integrated nature of Petrobras’ business will help mitigate lower commodity prices,” New York-based Sequeira wrote. “As such, we should see a rebound in refining results starting in 1Q09.”

To contact the reporters on this story: Shiyin Chen in Singapore at schen37@bloomberg.netJames Attwood in Santiago at jattwood3@bloomberg.net;

Last Updated: March 9, 2009 09:26 EDT