Braskem (NYSE:BAK) Stock Price Down 5.2% - Should You Sell?

Key Points

• Braskem shares fell 5.2% to about $1.73, extending a broader decline; the stock trades well below its 50-day and 200-day moving averages.
• Analyst sentiment is highly negative: the stock has a consensus rating of “Strong Sell”, with six Sell ratings and three Holds. The average price target is $2.56, although several firms recently cut their targets to $1.50.
• Braskem reported $4.20 billion in quarterly revenue and $1.61 in earnings per share, but continues to show a negative net margin and return on equity, underscoring its financial challenges.

Shares of Braskem S.A. (NYSE:BAK - Get Free Report) traded down 5.2% on Friday. The stock traded as low as $1.75 and last traded at $1.7250. Approximately 1,896,776 shares were traded during mid-day trading, a decline of 20% from the average daily volume of 2,360,914 shares. The stock had previously closed at $1.82.

Analyst Ratings Changes

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

Braskem Stock Down 5.8%

The firm has a fifty day simple moving average of $1.87 and a 200-day simple moving average of $2.91. The company has a market capitalization of $683.61 million, a P/E ratio of -0.71, a P/E/G ratio of 0.11 and a beta of 1.56.

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

Institutional Inflows and Outflows

A number of hedge funds have recently added to or reduced their stakes in the business. Engineers Gate Manager LP increased its position in 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 buying an additional 44,905 shares during the last quarter. Citadel Advisors LLC bought a new stake in shares of Braskem during the second quarter worth approximately $89,000. Ramsey Quantitative Systems acquired a new position in shares of Braskem in the second quarter valued at approximately $155,000. Bank of America Corp DE increased its stake in shares of Braskem by 178,471.4% during the first quarter. Bank of America Corp DE now owns 50,000 shares of the company's stock worth $183,000 after purchasing an additional 49,972 shares during the period. Finally, Brooklands Fund Management Ltd bought a new position in shares of Braskem during the first quarter worth approximately $2,013,000.

About Braskem

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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