Braskem (NYSE:BAK) Sets New 12-Month Low - What's Next?

Key Points

• Braskem shares hit a new 52-week low, falling to $1.40 before last trading at $1.4250, compared with a prior close of $1.49.
• Analyst sentiment has deteriorated sharply: HSBC, UBS, Citigroup and JPMorgan all downgraded the stock or cut targets. Braskem carries a consensus “Strong Sell” rating, with an average price target of $2.56.
• The company remains financially challenged, reporting a negative 7.28% net margin and negative 67.75% return on equity, while its stock trades well below its 50-day and 200-day moving averages.

Braskem S.A. (NYSE:BAK - Get Free Report) shares reached a new 52-week low during trading on Wednesday. The company traded as low as $1.40 and last traded at $1.4250, with a volume of 1882057 shares trading hands. The stock had previously closed at $1.49.

Analysts Set New Price Targets

BAK has been the topic of several recent analyst reports. HSBC lowered Braskem from a "buy" rating to a "hold" rating and reduced their target price for the stock from $6.50 to $1.50 in a report on Monday. Citigroup cut Braskem from a "neutral" rating to a "sell" rating in a report on Thursday, June 25th. JPMorgan Chase & Co. lowered Braskem from an "overweight" rating to a "neutral" rating in a research report on Tuesday, June 30th. UBS Group lowered Braskem from a "neutral" rating to a "sell" rating and decreased their price objective for the company from $4.00 to $1.50 in a research report on Tuesday, September 15th. Finally, Weiss Ratings restated a "sell (e+)" rating on shares of Braskem in a report on Friday, July 17th. Three research analysts have rated the stock with a Hold rating and six have issued a Sell rating to the stock. Based on data from MarketBeat.com, the company currently has a consensus rating of "Strong Sell" and an average target price of $2.56.

Braskem Stock Performance

The stock has a market cap of $568.01 million, a price-to-earnings ratio of -0.59, a P/E/G ratio of 0.09 and a beta of 1.56. The business has a 50-day simple moving average of $1.98 and a two-hundred day simple moving average of $3.05.

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

Hedge Funds Weigh In On Braskem

A number of large investors have recently modified their holdings of BAK. Engineers Gate Manager LP increased its position in shares of Braskem by 192.8% during the 2nd quarter. Engineers Gate Manager LP now owns 68,198 shares of the company's stock worth $166,000 after purchasing an additional 44,905 shares during the last quarter. Citadel Advisors LLC acquired a new stake in shares of Braskem in the 2nd quarter valued at approximately $89,000. Ramsey Quantitative Systems acquired a new stake in shares of Braskem in the 2nd quarter valued at approximately $155,000. Bank of America Corp DE grew its stake in shares of Braskem by 178,471.4% in the first quarter. Bank of America Corp DE now owns 50,000 shares of the company's stock valued at $183,000 after buying an additional 49,972 shares in the last quarter. Finally, Brooklands Fund Management Ltd bought a new position in shares of Braskem in the first quarter valued at $2,013,000.

Braskem Company Profile

Braskem SA is a Brazilian petrochemical company headquartered in São Paulo. Established in 2002 through the combination of Odebrecht Química and the petrochemical company Copene, Braskem has developed into one of Latin America's major producers of thermoplastic resins and basic petrochemicals.

The company manufactures polyethylene, polypropylene and polyvinyl chloride (PVC), which are used in packaging, construction, automotive components, consumer goods and other industrial applications.

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