Braskem (NYSE:BAK) Stock Price Down 5% - Should You Sell?

Key Points

• Braskem shares fell 5% to $1.415, with trading volume well below the average daily level.
• Analyst sentiment is strongly negative: HSBC, UBS, Citi and JPMorgan recently downgraded the stock, while the consensus rating is “Strong Sell” with an average price target of $2.56.
• Braskem reported $4.20 billion in quarterly revenue and $1.61 in EPS, but continues to show financial weakness, including a negative net margin of 7.28% and negative return on equity of 67.75%.

Shares of Braskem S.A. (NYSE:BAK - Get Free Report) dropped 5% during trading on Tuesday. The stock traded as low as $1.4150 and last traded at $1.4150. 804,207 shares traded hands during trading, a decline of 66% from the average daily volume of 2,368,142 shares. The stock had previously closed at $1.49.

Wall Street Analyst Weigh In

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

Braskem Stock Performance

The company's fifty day moving average is $2.00 and its two-hundred day moving average is $3.07. The firm has a market cap of $560.03 million, a price-to-earnings ratio of -0.58, a price-to-earnings-growth ratio of 0.09 and a beta of 1.56.

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 firm had revenue of $4.20 billion during the quarter. As a group, analysts forecast that Braskem S.A. will post 1.58 earnings per share for the current fiscal year.

Institutional Investors Weigh In On Braskem

Hedge funds have recently modified their holdings of the stock. EverSource Wealth Advisors LLC grew its position in Braskem by 444.4% in the fourth quarter. EverSource Wealth Advisors LLC now owns 8,579 shares of the company's stock valued at $25,000 after acquiring an additional 7,003 shares in the last quarter. Cetera Investment Advisers acquired a new position in shares of Braskem during the first quarter worth $51,000. Citadel Advisors LLC purchased a new position in shares of Braskem in the second quarter valued at $89,000. Private Advisor Group LLC purchased a new position in shares of Braskem in the first quarter valued at $157,000. Finally, Bank of America Corp DE grew its holdings in Braskem by 178,471.4% during the 1st quarter. Bank of America Corp DE now owns 50,000 shares of the company's stock valued at $183,000 after purchasing an additional 49,972 shares in the last quarter.

About Braskem

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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