Education
About Us
Working with TipRanks
Follow Us
Braskem SA (BAK)
NYSE:BAK
Top Page
Braskem SA
(NYSE:BAK)
44Neutral
Positive Factors
Brazil Operations
Brazil's operations saw significant improvement with a 45% sequential rise in EBITDA, attributed to an increase in sales volumes and exports.
Operational Performance
Braskem's 3Q24 EBITDA exceeded expectations, largely driven by stronger results in the US, Europe, and Mexican operations.
Negative Factors
Geological Event Impact
Braskem announced an increase in the provision related to the Alagoas geological event.
Leverage and Debt
Braskem's current leverage stands at 5.8x ND/EBITDA, presenting a challenging macro-environment for the new CFO.
Petrochemical Spreads
The outlook for petrochemical spreads will remain challenging given the weak current demand scenario and the strong capacity addition expected to come online in China.
Braskem SA (BAK) vs. S&P 500 (SPY)
Market Cap
$1.47B
Dividend YieldN/A
Average Volume (3M)796.92K
Price to Earnings (P/E)―
Beta (1Y)1.17
Revenue Growth1.97%
EPS Growth-121.00%
CountryUS
Employees8,569
SectorBasic Materials
Sector Strength58
IndustryChemicals
Share Statistics
EPS (TTM)-5.17
Shares Outstanding172,530,200
10 Day Avg. Volume971,882
30 Day Avg. Volume796,923
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.59
Price to Cash Flow (P/CF)N/A
P/FCF Ratio0.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$5.10Price Target Upside25.00% Upside
Rating ConsensusHold
Number of Analyst Covering1
Braskem SA Business Overview & Revenue Model
Company DescriptionBraskem SA (BAK) is a leading petrochemical company based in Brazil, operating primarily in the chemical and plastics industry. The company is the largest producer of thermoplastic resins in the Americas and a significant player in the global market. Braskem's core products include a wide range of polyolefins, such as polyethylene and polypropylene, as well as other chemicals like vinyls and basic petrochemicals. The company serves various sectors, including automotive, packaging, and construction, providing essential materials for manufacturing and industrial applications.
How the Company Makes MoneyBraskem SA generates revenue primarily through the production and sale of chemical and plastic products. The company's revenue model is centered around its extensive portfolio of polyolefins, vinyls, and basic petrochemicals, which are sold to manufacturers and industrial clients worldwide. Key revenue streams include the sale of polyethylene and polypropylene, which are used in packaging, automotive components, and consumer goods. Braskem also benefits from strategic partnerships and joint ventures that enhance its production capabilities and market reach. Additionally, the company's focus on innovation and sustainability initiatives helps maintain competitive advantages and meet evolving customer demands, contributing to its earnings.
Braskem SA Financial Statement Overview
Summary
Braskem SA is experiencing financial distress with declining revenues, persistent losses, and high leverage. The negative equity raises solvency concerns, and cash flow generation challenges impact overall liquidity.Income Statement
Braskem SA has faced declining revenues and profitability. The TTM shows a negative net income and EBITDA, with a significant drop in gross profit margin from previous years. The revenue growth rate is negative, indicating a contraction in the company's business activities.32
Negative
Balance Sheet
The balance sheet shows high leverage with a negative stockholders' equity, indicating financial instability. The debt-to-equity ratio is not calculable due to negative equity, posing a risk to financial health. The company has struggled to maintain positive equity over recent years.25
Negative
Cash Flow
Cash flow statements reveal a negative free cash flow, reflecting challenges in generating cash from operations. The operating cash flow to net income ratio highlights operational inefficiencies, though there's been some improvement in operating cash flow in the latest TTM.40
Negative
| Breakdown | |||||
| TTM | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 | Dec 2019 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 74.95B | 70.57B | 96.52B | 105.63B | 58.54B | 52.32B | Gross Profit |
| 5.86B | 3.02B | 11.36B | 32.06B | 11.21B | 6.44B | EBIT |
| 481.32M | -1.83B | 4.27B | 26.04B | -228.36M | -733.89M | EBITDA |
| -926.40M | 3.80B | 8.84B | 27.28B | -1.65B | 2.18B | Net Income Common Stockholders |
| -7.25B | -4.58B | -820.00M | 13.98B | -7.02B | -2.64B |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 7.93B | 19.14B | 14.76B | 11.34B | 16.17B | 8.49B | Total Assets |
| 59.19B | 91.74B | 88.05B | 92.56B | 86.08B | 68.13B | Total Debt |
| 37.97B | 59.91B | 52.78B | 53.53B | 59.56B | 43.70B | Net Debt |
| 32.42B | 45.72B | 40.32B | 44.85B | 45.70B | 36.89B | Total Liabilities |
| 53.28B | 88.46B | 81.94B | 86.36B | 89.95B | 64.18B | Stockholders Equity |
| 6.79B | 3.99B | 7.32B | 7.87B | -2.20B | 4.89B |
| Cash Flow | Free Cash Flow | ||||
| -1.32B | -6.80B | 4.10B | 11.37B | 3.53B | -417.25M | Operating Cash Flow |
| 2.64B | -2.27B | 8.95B | 14.79B | 6.29B | 2.27B | Investing Cash Flow |
| -3.91B | -4.53B | -4.95B | -3.38B | -2.72B | -2.67B | Financing Cash Flow |
| -1.06B | 8.87B | 225.00M | -16.97B | 2.17B | 1.64B |
Braskem SA Technical Analysis
Neutral
4.08
Price Trends
4.21
Negative
4.48
Negative
5.54
Negative
Market Momentum
-0.06
Negative
54.56
Neutral
67.91
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For BAK, the sentiment is Neutral. The current price of 4.08 is above the 20-day moving average (MA) of 3.74, below the 50-day MA of 4.21, and below the 200-day MA of 5.54, indicating a neutral trend. The MACD of -0.06 indicates Negative momentum. The RSI at 54.56 is Neutral, neither overbought nor oversold. The STOCH value of 67.91 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for BAK.
Braskem SA Risk Analysis
Braskem SA disclosed 74 risk factors in its most recent earnings report. Braskem SA reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Braskem SA Peers Comparison
Overall Rating
UnderperformOutperform
Sector (47)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
75 Outperform | $10.27B | 11.67 | 16.11% | 3.64% | 1.91% | 2.94% | |
59 Neutral | $22.95B | 17.11 | 10.69% | 7.42% | -1.46% | -36.00% | |
59 Neutral | $13.20B | 21.89 | 5.76% | 2.02% | -3.24% | 24.29% | |
58 Neutral | $24.80B | 22.72 | 6.14% | 7.87% | -3.72% | 91.57% | |
50 Neutral | $2.81B | ― | -5.22% | 6.21% | -1.23% | -277.52% | |
47 Neutral | $2.71B | -3.60 | -20.77% | 3.28% | 3.41% | -27.70% | |
44 Neutral | $1.47B | ― | -8638.28% | ― | 1.97% | -121.00% |
* Basic Materials Sector Average
Performance Comparison
BAK
Braskem SA
4.08
-6.22
-60.39%
EMN
Eastman Chemical
88.92
-8.05
-8.30%
HUN
Huntsman
16.20
-8.52
-34.47%
LYB
LyondellBasell
70.95
-25.08
-26.12%
WLK
Westlake Chemical
102.92
-48.96
-32.24%
DOW
Dow Inc
35.24
-19.65
-35.80%
Braskem SA Earnings Call Summary
Earnings Call Date: Feb 27, 2025 | % Change Since: 0.00% | Next Earnings Date: May 7, 2025
Earnings Call Sentiment Neutral
Braskem showed strong financial performance with significant increases in EBITDA and cash generation, and successful operations in Mexico. However, the decrease in international spreads and operational challenges in the US and Europe segments, along with increased provisions for the Alagoas event, present ongoing challenges.Highlights
Increased EBITDA and Operating Cash Generation
Braskem reported a consolidated recurring EBITDA of US$1.1 billion for 2024, which is a 46% increase compared to 2023. Operating cash generation also amounted to approximately US$788 million for the year.
Cash Position and Debt Management
Braskem ended 2024 with a cash position of US$2.4 billion, sufficient to cover debt maturities over the next 47 months. The company's leverage decreased to 7.42 times, down from the previous quarter.
Record Sales of Green Polyethylene
The annual sales of resins from renewable sources increased by 23%, reaching an all-time high with 191,000 tons sold in 2024.
Successful Operations in Mexico
Mexico segment recorded a 5% increase in sales volume for 2024, and the recurring EBITDA for the year was US$280 million, 166% higher than in 2023.
Lowlights
Reduction in International Market Spreads
The main spreads in the international market fell in the fourth quarter, especially impacting the spreads for PE and main chemicals, leading to lower quarterly results.
Operational Challenges in the United States and Europe
The utilization rate in the US and Europe segments was 9 percentage points lower in Q4 2024 due to scheduled shutdowns, leading to a 34% decrease in recurring EBITDA compared to 2023.
Increased Provisions for Alagoas Event
Braskem increased its provision by US$1.3 billion for measures related to the Alagoas event, with a total provision balance of R$5.6 billion at the end of 2024.
Company Guidance
In the recent Braskem conference call, the company provided comprehensive guidance on its financial performance and strategic direction for 2024 and beyond. The company reported a consolidated recurring EBITDA of $1.1 billion for 2024, marking a 46% increase from the previous year, primarily driven by higher polyethylene sales and improved spreads in Brazil and Mexico. The operating cash generation was approximately $788 million, while the cash position ended at $2.4 billion, covering debt maturities for the next 47 months. The company maintained a leverage ratio of 7.42 times, reflecting a reduction of 0.7 times from the previous quarter. In terms of operational efficiency, Braskem's average global accident frequency rate improved by 16% to 0.91 events per million hours worked. Strategically, the company is focusing on optimizing its asset portfolio, including increasing the use of gas as a feedstock and expanding green ethylene production capacities. The company also highlighted its plans for capital expenditure, with a budget of $484 million for 2025, emphasizing the importance of maintaining operational safety while optimizing costs. Additionally, Braskem is committed to maintaining financial resilience, indicated by its issuance of $850 million in debt securities and partial repurchase of its hybrid bond. Looking ahead, Braskem plans to capitalize on its competitive advantages in the green business sector and continue its strategic transformation to ensure long-term sustainability and profitability.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.