Braskem SA (BAK) AI Stock Analysis

• Market Cap: $1.37B
• Dividend Yield: N/A
• Average Volume (3M): 873.50K
• Price to Earnings (P/E): ―
• Beta (1Y): 0.94
• Revenue Growth: -3.33%
• EPS Growth: 44.37%
• Country: US
• Employees: 8,569
• Sector: Basic Materials
• Sector Strength: 64
• Industry: Chemicals
• EPS (TTM): -0.26
• Shares Outstanding: 172,530,200
• 10 Day Avg. Volume: 921,149
• 30 Day Avg. Volume: 873,496
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 8.37
• Enterprise Value/Revenue: 0.15
• Enterprise Value/Gross Profit: 1.92
• Enterprise Value/Ebitda: -3.99
• 1Y Price Target: $4.00
• Price Target Upside: 17.30% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 2

• Rating: 45 Neutral
• Price Target: $3.00 ▼(-12.02% Downside)

Braskem SA's overall stock score reflects significant financial challenges, including high leverage and declining profitability, which are the most impactful factors. Technical analysis indicates a bearish trend, and valuation metrics are unattractive. Despite some positive developments highlighted in the earnings call, such as EBITDA growth and strategic initiatives, the company's financial instability remains a major concern.

Positive Factors

Debt Management

Liability management is not a big issue at least in the short-term, given that the company has a long debt profile with 65% maturing from 2030 onwards.

Leadership

Mr. Jens has vast experience including roles as a Board Member, CEO, CFO, CIO and Managing Director in different sectors, including infrastructure and petrochemicals.

Negative Factors

Financial Performance

Braskem's EBITDA is expected to be well below its mid-cycle level over the next years.

Geological Event

The Alagoas geological event remains one of the main risks in Braskem’s investment thesis and the company itself does not discard further provisions related to this matter.

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 Business Overview & Revenue Model

Company Description

Braskem S.A., together with its subsidiaries, produces and sells thermoplastic resins. The company operates through three segments: Brazil, United States and Europe, and Mexico. The Brazil segment produces and sells chemicals, including ethylene, polymer and chemical grade propylene, butadiene, butene-1, benzene, toluene, and xylenes products; fuels, such as automotive gasoline, liquefied petroleum gas, ethyl tertiary-butyl ether, and methyl tertiary-butyl ether; intermediates, such as cumene; aliphatics, aromatics, and hydrogenated solvents; and specialties comprising isoprene, dicyclopentadiene, piperylene, nonene, tetramer, polyisobutylene, and hydrocarbon resins. This segment also produces and sells polyethylene (PE) and polypropylene (PP); supplies electricity and other inputs to second-generation producers; produces and sells of PE, including the production of green PE from renewable resources; and produces and sells polyvinyl chloride and caustic soda. The United States and Europe segment produces and sells PP in the United States and Germany. The Mexico segment produces and sells ethylene, high-density PE, and low-density PE in Mexico. It also manufactures, sells, imports, and exports chemicals, petrochemicals, and fules; produces, supplies, and sells utilities, such as steam, water, compressed air, and industrial gases; and provides industrial services. The company was formerly known as Copene Petroquímica do Nordeste S.A. and changed its name to Braskem S.A. in 2002. Braskem S.A. was founded in 1972 and is headquartered in Camaçari, Brazil.

How the Company Makes Money

Braskem generates revenue primarily through the production and sale of its petrochemical products, including polyethylene, polypropylene, and PVC. The company operates several production facilities and has a diverse customer base across different sectors, which helps stabilize its revenue streams. Key revenue sources include sales to manufacturers in packaging, automotive, and construction industries. Additionally, Braskem has entered into strategic partnerships and joint ventures that enhance its market position and provide access to new technologies and markets. The company's focus on sustainability and development of bio-based plastics also positions it to capitalize on the growing demand for environmentally friendly products, contributing positively to its earnings.

Braskem SA Financial Statement Overview

Summary

Braskem SA faces significant financial challenges, including declining profitability, high leverage, and cash flow issues. Negative equity and substantial debt levels pose risks, and recent revenue declines and net losses compound the company's financial instability.

Income Statement

Braskem SA has seen a decline in total revenue from 2021 to 2024, with significant net losses reported in recent years. The Gross Profit Margin has decreased, reflecting pressure on profitability. The EBIT and EBITDA margins have also weakened, indicating operational challenges.

Balance Sheet

The balance sheet shows negative stockholders' equity as of 2024, indicating financial instability. The debt-to-equity ratio is not calculable due to negative equity, highlighting high leverage. The company has a substantial total debt, increasing financial risk. ROE is not meaningful with negative equity.

Cash Flow

Braskem SA's cash flow situation is concerning, with negative free cash flow reported for the past two years. Operating cash flow has improved since 2023 but remains weak compared to historical levels. The free cash flow to net income ratio is negative, indicating cash flow challenges.

Breakdown	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	77.41B	70.57B	96.52B	105.63B	58.54B
Gross Profit	6.00B	3.02B	11.36B	32.06B	11.21B
EBITDA	2.70B	3.80B	8.84B	27.28B	-1.65B
Net Income	-11.32B	-4.58B	-820.00M	13.98B	-7.02B
Balance Sheet
Total Assets	101.58B	91.74B	88.05B	92.56B	86.08B
Cash, Cash Equivalents and Short-Term Investments	16.77B	19.14B	14.76B	11.34B	16.17B
Total Debt	73.72B	59.91B	52.78B	53.53B	59.56B
Total Liabilities	105.85B	88.46B	81.94B	86.36B	89.95B
Stockholders Equity	-4.78B	3.99B	7.32B	7.87B	-2.20B
Cash Flow
Free Cash Flow	-1.33B	-6.80B	4.10B	11.37B	3.53B
Operating Cash Flow	2.44B	-2.27B	8.95B	14.79B	6.29B
Investing Cash Flow	-3.48B	-4.53B	-4.95B	-3.38B	-2.72B
Financing Cash Flow	469.00M	8.87B	225.00M	-16.97B	2.17B

Braskem SA Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 3.41
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For BAK, the sentiment is Positive. The current price of 3.41 is above the 20-day moving average (MA) of 3.14, above the 50-day MA of 3.22, and below the 200-day MA of 3.86, indicating a neutral trend. The MACD of 0.06 indicates Negative momentum. The RSI at 58.48 is Neutral, neither overbought nor oversold. The STOCH value of 60.40 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for BAK.

Braskem SA Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
WLKP	71 Outperform	$778.77M	14.79	10.28%	8.63%	-7.24%	-7.30%
Sector *	61 Neutral	$10.27B	6.37	0.76%	2.91%	3.10%	-36.03%
HUN	59 Neutral	$1.91B	―	-10.43%	9.07%	-1.56%	-259.58%
DOW	48 Neutral	$17.30B	75.91	-5.59%	10.25%	-2.82%	-186.41%
CE	47 Neutral	$5.04B	6.84	-25.69%	1.70%	-5.83%	-183.85%
BAK	45 Neutral	$1.37B	―	-8638.28%	―	-3.33%	44.37%
TROX	45 Neutral	$657.88M	―	-14.11%	10.17%	0.20%	-292.54%