Petroleo Brasileiro SA (PETR3), Brazil’s state-controlled oil producer, rose to the highest in more than seven months after Goldman Sachs Group Inc. recommended the stock as its top energy pick in Latin America.
Goldman added Petrobras to its “Latam Spotlight List” in a July 13 note to clients, saying the company will benefit from higher production volumes and the appreciation of the Brazilian real. The oil producer is also poised to gain from potential gasoline price increases after a presidential election in Brazil, Goldman said.
Petrobras, as the Rio de Janeiro-based company is known, rose 4.5 percent to 19.10 reais in Sao Paulo, the highest since Nov. 29. That extends its 4-day gain to 10.5 percent.
“We continue to see a compelling risk/reward for the stock at current levels,” Goldman (GS) analysts including Felipe Mattar in Sao Paulo said in the note. Mattar reiterated a “buy” recommendation on the stock. The company is experiencing “a turning point in production that we expect to accelerate.”
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