Braskem (NYSE:BAK) Trading Down 7.3% - Here's Why

Key Points

• Braskem shares fell 7.3% to about $2.24, with trading volume significantly below average. The stock is down well below its 50-day and 200-day moving averages.
• Analyst sentiment has deteriorated sharply, with multiple firms downgrading the stock; the consensus rating is “Strong Sell”, based on three Hold and five Sell ratings, with an average price target of $3.40.
• Although Braskem exceeded quarterly earnings and revenue estimates, the company continues to report weak profitability, including a negative net margin of 13.72% and negative return on equity of 23.17%.

Braskem S.A. (NYSE:BAK - Get Free Report)'s stock price traded down 7.3% during trading on Friday . The company traded as low as $2.21 and last traded at $2.2350. Approximately 380,982 shares were traded during mid-day trading, a decline of 84% from the average session volume of 2,395,477 shares. The stock had previously closed at $2.41.

Analysts Set New Price Targets

BAK has been the subject of a number of analyst reports. Bradesco Corretora downgraded shares of Braskem from an "outperform" rating to an "underperform" rating and set a $1.50 target price for the company. in a research note on Tuesday, April 21st. JPMorgan Chase & Co. cut shares of Braskem from an "overweight" rating to a "neutral" rating in a research report on Tuesday, June 30th. Citigroup lowered Braskem from a "neutral" rating to a "sell" rating in a research report on Thursday, June 25th. Weiss Ratings reissued a "sell (e+)" rating on shares of Braskem in a research note on Friday, July 17th. Finally, Zacks Research lowered Braskem from a "strong-buy" rating to a "hold" rating in a research report on Monday, May 18th. Three analysts have rated the stock with a Hold rating and five have given a Sell rating to the stock. According to MarketBeat.com, the company has a consensus rating of "Strong Sell" and an average price target of $3.40.

Braskem Trading Down 3.9%

The company has a market cap of $922.77 million, a price-to-earnings ratio of -0.55, a P/E/G ratio of 0.13 and a beta of 1.61. The stock's 50-day moving average is $3.09 and its 200-day moving average is $3.61.

Braskem (NYSE:BAK - Get Free Report) last posted its quarterly earnings results on Thursday, May 14th. The company reported $0.69 earnings per share for the quarter, beating the consensus estimate of $0.21 by $0.48. The firm had revenue of $3.51 billion during the quarter, compared to the consensus estimate of $3.39 billion. Braskem had a negative net margin of 13.72% and a negative return on equity of 23.17%. As a group, analysts predict that Braskem S.A. will post 1.64 EPS for the current year.

Institutional Inflows and Outflows

Several institutional investors and hedge funds have recently added to or reduced their stakes in BAK. UBS Group AG raised its position in shares of Braskem by 2.6% during the third quarter. UBS Group AG now owns 783,445 shares of the company's stock worth $1,896,000 after purchasing an additional 19,956 shares during the period. Brooklands Fund Management Ltd acquired a new stake in Braskem in the 1st quarter valued at $2,013,000. State Street Corp increased its stake in Braskem by 7.2% during the 4th quarter. State Street Corp now owns 311,507 shares of the company's stock valued at $919,000 after purchasing an additional 20,805 shares in the last quarter. Renaissance Technologies LLC increased its stake in Braskem by 619.5% during the 4th quarter. Renaissance Technologies LLC now owns 265,488 shares of the company's stock valued at $783,000 after purchasing an additional 228,588 shares in the last quarter. Finally, Jump Financial LLC raised its holdings in Braskem by 607.1% during the second quarter. Jump Financial LLC now owns 263,771 shares of the company's stock worth $865,000 after buying an additional 226,467 shares during the last quarter.

Braskem Company Profile

Braskem NYSE: BAK is a leading integrated petrochemical company based in São Paulo, Brazil, and holds the distinction of being the largest thermoplastic resins producer in Latin America. The company operates across the entire value chain, from feedstock sourcing and polymer production to distribution and recycling. Braskem's comprehensive approach to petrochemical manufacturing enables it to serve a diverse set of end markets with a broad portfolio of products.

Braskem's core product lines include polypropylene, polyethylene and polyvinyl chloride (PVC), which are used in industries such as packaging, automotive, construction and electrical & electronics.

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