Braskem (NYSE:BAK) Shares Gap Down - Should You Sell?

Key Points

• Braskem shares fell sharply, opening at $1.55 versus a prior close of $1.63 and later trading near $1.4450 on elevated volume.
• Analyst sentiment is strongly negative: recent downgrades from Zacks, Citigroup and JPMorgan contributed to an overall “Strong Sell” rating, with an average price target of $3.40.
• Braskem reported $4.20 billion in quarterly revenue and $1.61 in EPS, but continues to show financial strain, including a negative net margin of 7.28% and negative return on equity of 67.75%.

Braskem S.A. (NYSE:BAK - Get Free Report) shares gapped down prior to trading on Wednesday . The stock had previously closed at $1.63, but opened at $1.55. Braskem shares last traded at $1.4450, with a volume of 2,007,120 shares trading hands.

Analyst Upgrades and Downgrades

Several brokerages have recently issued reports on BAK. Zacks Research downgraded shares of Braskem from a "strong-buy" rating to a "hold" rating in a research report on Monday, May 18th. Citigroup cut Braskem from a "neutral" rating to a "sell" rating in a research report on Thursday, June 25th. JPMorgan Chase & Co. downgraded shares of Braskem from an "overweight" rating to a "neutral" rating in a report on Tuesday, June 30th. Finally, Weiss Ratings restated a "sell (e+)" rating on shares of Braskem in a report on Friday, July 17th. Three equities research analysts have rated the stock with a Hold rating and five have given a Sell rating to the stock. According to data from MarketBeat, Braskem presently has an average rating of "Strong Sell" and an average price target of $3.40.

Braskem Price Performance

The company has a market capitalization of $587.93 million, a P/E ratio of -0.61, a price-to-earnings-growth ratio of 0.11 and a beta of 1.62. The company's 50-day moving average price is $2.40 and its two-hundred day moving average price is $3.44.

Braskem (NYSE:BAK - Get Free Report) last issued its quarterly earnings data 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. On average, analysts anticipate that Braskem S.A. will post 1.51 earnings per share for the current fiscal year.

Institutional Investors Weigh In On Braskem

Several institutional investors and hedge funds have recently bought and sold shares of BAK. Ramsey Quantitative Systems bought a new position in Braskem in the 2nd quarter valued at about $155,000. Bank of America Corp DE boosted its position in shares of Braskem by 178,471.4% during the 1st quarter. Bank of America Corp DE now owns 50,000 shares of the company's stock worth $183,000 after acquiring an additional 49,972 shares in the last quarter. Brooklands Fund Management Ltd acquired a new stake in shares of Braskem during the 1st quarter worth approximately $2,013,000. Cetera Investment Advisers bought a new position in Braskem in the first quarter valued at approximately $51,000. Finally, Private Advisor Group LLC bought a new position in Braskem in the first quarter valued at approximately $157,000.

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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