Oct 6, 2016
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How Will Petrobras' Revenue Move If Crude Oil Prices Continue To Remain Depressed Over The Next Two Years?

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Like most of the oil and gas companies worldwide, Petroleo Brasileiro SA Petrobras ( PBR ), commonly known as Petrobras, has suffered a severe blow due to the slump in commodity prices over the last two years. The company's overall revenue plunged almost 40% in 2015, due to the depressed commodity prices throughout the year. This caused the Brazilian energy company's stock to crash to less than $10 per share, representing a drop of more than 50% over the last two years.
Based on the current commodity prices, and the market trends, we forecast a gradual recovery in crude oil prices over the next couple of years. We estimate crude oil to rebound to around $70 per barrel by 2018 in our base case. However, since the outlook of commodity markets continues to be uncertain, there is a significant downside potential to the company's top line as well as profitability. In such a case, where the volatility in the global markets continues due to the Organization of the Petroleum Ex..

Like most of the oil and gas companies worldwide, Petroleo Brasileiro SA Petrobras ( PBR ), commonly known as Petrobras, has suffered a severe blow due to the slump in commodity prices over the last two years. The company's overall revenue plunged almost 40% in 2015, due to the depressed commodity prices throughout the year. This caused the Brazilian energy company's stock to crash to less than $10 per share, representing a drop of more than 50% over the last two years.

Based on the current commodity prices, and the market trends, we forecast a gradual recovery in crude oil prices over the next couple of years. We estimate crude oil to rebound to around $70 per barrel by 2018 in our base case. However, since the outlook of commodity markets continues to be uncertain, there is a significant downside potential to the company's top line as well as profitability. In such a case, where the volatility in the global markets continues due to the Organization of the Petroleum Exporting Countries (OPEC) maintaining its high level of production, or lower global demand for oil, crude oil prices could average at around $50 per barrel until 2018. In that case, we expect Petrobras' 2018 revenue to be close to 30% lower than our base case estimates. Below, we show how each division would perform in the aforementioned base case and downside case.

PBR-Q&A-2-1

Have more questions about Petrobras ( PBR )? See the links below:

  • How Will Petrobras' Revenue Move If Crude Oil Prices Rebound Over The Next Two Years?
  • Is It Time For Crude Oil Prices To Recover?
  • Petrobras' 2Q'16 Earnings Plunge On The Back Of Lower Commodity Prices
  • Here's Why We Revised Petrobras' Price Estimate To $11 Per Share
  • Petrobras Q1 Earnings: Revenues And Earnings Suffer Due To Low Oil Price Environment, Company Cuts Capex
  • How Are Petrobras' Revenue & EBITDA Composition Expected To Change By 2020?
  • What's Petrobras' Revenue & Earnings Breakdown In Terms of Different Products?
  • What's Petrobras' Fundamental Value Based On Expected 2016 Results?
  • How Is Petrobras' Revenue & EBITDA Composition Expected To Change in 2016?
  • By What Percentage Can Petrobras' Revenues Grow Over the Next Five Years?

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