Braskem (NYSE:BAK) Sees Large Volume Increase - Should You Buy?

Key Points

• Braskem shares rose 3.7% to $1.825 amid unusually strong trading volume of roughly 2.49 million shares, up 6% from the prior session.
• Analyst sentiment is highly negative: three analysts rate the stock Hold and six rate it Sell, resulting in a “Strong Sell” consensus and an average price target of $2.56.
• Braskem reported $4.20 billion in quarterly revenue and $1.61 EPS, but continues to show weak profitability, including a negative 67.75% return on equity and a negative 7.28% net margin.

Shares of Braskem S.A. (NYSE:BAK - Get Free Report) saw unusually-strong trading volume on Tuesday. Approximately 2,491,216 shares changed hands during mid-day trading, an increase of 6% from the previous session's volume of 2,349,089 shares. The stock last traded at $1.8250 and had previously closed at $1.78.

Wall Street Analysts Forecast Growth

A number of brokerages recently weighed in on BAK. Weiss Ratings reiterated a "sell (e+)" rating on shares of Braskem in a research report on Friday, July 17th. Citigroup cut shares of Braskem from a "neutral" rating to a "sell" rating in a report on Thursday, June 25th. HSBC downgraded shares of Braskem from a "buy" rating to a "hold" rating and lowered their target price for the company from $6.50 to $1.50 in a research note on Monday, September 28th. JPMorgan Chase & Co. downgraded shares of Braskem from an "overweight" rating to a "neutral" rating in a research note on Tuesday, June 30th. Finally, UBS Group lowered shares of Braskem from a "neutral" rating to a "sell" rating and cut their target price for the stock from $4.00 to $1.50 in a report on Tuesday, September 15th. Three equities research analysts have rated the stock with a Hold rating and six have assigned a Sell rating to the stock. According to MarketBeat, Braskem presently has an average rating of "Strong Sell" and an average target price of $2.56.

Braskem Stock Up 3.7%

The stock has a market capitalization of $735.42 million, a P/E ratio of -0.76, a price-to-earnings-growth ratio of 0.11 and a beta of 1.56. The company has a fifty day simple moving average of $1.85 and a two-hundred day simple moving average of $2.87.

Braskem (NYSE:BAK - Get Free Report) last announced its quarterly earnings results on Friday, June 26th. The company reported $1.61 earnings per share (EPS) for the quarter. Braskem had a negative return on equity of 67.75% and a negative net margin of 7.28%. The company had revenue of $4.20 billion during the quarter. As a group, equities analysts forecast that Braskem S.A. will post 1.58 earnings per share for the current year.

Institutional Trading of Braskem

Several hedge funds have recently bought and sold shares of BAK. Cetera Investment Advisers bought a new position in Braskem in the first quarter valued at approximately $51,000. Citadel Advisors LLC acquired a new position in shares of Braskem in the second quarter valued at approximately $89,000. Ramsey Quantitative Systems acquired a new position in shares of Braskem in the second quarter valued at approximately $155,000. Private Advisor Group LLC bought a new stake in shares of Braskem during the first quarter worth $157,000. Finally, Engineers Gate Manager LP increased its position in shares of Braskem by 192.8% during the second quarter. Engineers Gate Manager LP now owns 68,198 shares of the company's stock worth $166,000 after acquiring an additional 44,905 shares in the last quarter.

Braskem Company Profile

Braskem SA is a Brazilian petrochemical company headquartered in São Paulo, Brazil. The company produces basic chemicals and thermoplastic resins used in packaging, construction, automotive components, consumer goods, agriculture, and other industrial applications.

Its product portfolio includes olefins such as ethylene and propylene, polyolefins including polyethylene and polypropylene, polyvinyl chloride (PVC), caustic soda, and other chemical intermediates. Braskem also markets renewable polyethylene under the “I'm green” brand, which is made from sugarcane-based ethanol.

Established in 2002 through the consolidation of petrochemical assets in Brazil, Braskem expanded internationally through subsequent acquisitions and investments.

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