tiprankstipranks
Trending News
More News >
Braskem SA (BAK)
NYSE:BAK

Braskem SA (BAK) AI Stock Analysis

Compare
283 Followers

Top Page

BA

Braskem SA

(NYSE:BAK)

Rating:46Neutral
Price Target:
$3.50
▼(-8.38%Downside)
Braskem SA's overall stock score is primarily hindered by its financial instability, marked by high leverage and negative equity. While the earnings call showed some operational improvements and strategic progress, the company's valuation and technical analysis suggest caution. The absence of dividends and negative earnings further reduce its appeal, despite short-term operational gains.
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 (BAK) vs. SPDR S&P 500 ETF (SPY)

Braskem SA Business Overview & Revenue Model

Company DescriptionBraskem 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 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 Earnings Call Summary

Earnings Call Date:May 09, 2025
(Q1-2025)
|
% Change Since: -3.29%|
Next Earnings Date:Aug 06, 2025
Earnings Call Sentiment Neutral
Braskem's earnings call for Q1 2025 highlighted improved operational performance and significant EBITDA growth, alongside strategic initiatives such as the launch of the ethane import terminal in Mexico and increased green ethylene capacity. However, challenges remain with high corporate leverage, negative working capital impacts, and continued struggles in the US and Europe PP segments amid a prolonged petrochemical downturn.
Q1-2025 Updates
Positive Updates
Improved Operational Performance
Braskem's petrochemical plants showed a higher utilization rate in Q1 2025 compared to Q4 2024, with a global accident frequency rate of 0.92, aligning with top market standards.
Significant EBITDA Growth
Consolidated recurring EBITDA increased by 121% from Q4 2024, reaching $224 million, driven by higher spreads of PE and chemicals in the international market and increased sales of PP in the US and Europe.
Strong Cash Position
Braskem ended Q1 2025 with a cash position of $2 billion, covering debt maturities for the next 33 months, excluding the $1 billion revolving credit line available until December 2026.
Green Ethylene Capacity Increase
The green ethylene capacity at Triunfo was revised to 270,000 tons per year, exceeding previous forecasts due to successful industrial tests.
Launch of Ethane Import Terminal in Mexico
Braskem Idesa inaugurated an ethane import terminal with a capacity to receive and store 54,000 tons and transport 80,000 barrels of ethane per day, enhancing operational capability in the region.
Negative Updates
High Corporate Leverage
Corporate leverage stood at 7.92 times at the end of Q1 2025, indicating a significant challenge in managing debt levels.
Negative Working Capital Impact
Operating cash consumption of approximately BRL 936 million was primarily due to negative variations in working capital, driven by inventory management amid scheduled shutdowns.
Challenges in Europe and US PP Segment
The US and Europe segment faced challenges due to low PP margins, exacerbated by planned and unplanned shutdowns of propylene suppliers.
Prolonged Petrochemical Downturn
The company anticipates ongoing challenges due to international market shutdowns and new tariff scenarios, affecting resin spreads and overall market conditions.
Company Guidance
In the first quarter of 2025, Braskem achieved a consolidated recurring EBITDA of $224 million, marking a 121% increase from the previous quarter, with a net profit of $113 million attributable to shareholders. The company's global accident frequency rate stood at 0.92 events per million hours worked, maintaining high operational safety. The Brazil segment saw a 4-percentage point rise in the average utilization rate, leading to a recurring EBITDA of $199 million, a 101% increase. In the United States and Europe, the utilization rate increased by 13 percentage points, resulting in a recurring EBITDA of $20 million. Mexico reported a recurring EBITDA of $37 million, up by 6% from the previous quarter. Braskem's cash position at the end of Q1 was $2 billion, sufficient to cover debt maturities over the next 33 months, excluding a $1 billion revolving credit line maturing in December 2026. The company's corporate leverage was at 7.92 times, with 68% of corporate debt maturing from 2030, reflecting a long-term debt profile.

Braskem SA Financial Statement Overview

Summary
Braskem SA faces significant financial challenges, with declining profitability, high leverage, and cash flow issues. Negative equity and substantial debt levels pose risks, while recent revenue declines and net losses compound the company's financial instability.
Income Statement
40
Negative
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
30
Negative
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
45
Neutral
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 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income StatementTotal Revenue
77.41B70.57B96.52B105.63B58.54B
Gross Profit
6.00B3.02B11.36B32.06B11.21B
EBIT
1.01B-1.83B4.27B26.04B-228.36M
EBITDA
2.70B3.80B8.84B27.28B-1.65B
Net Income Common Stockholders
-11.32B-4.58B-820.00M13.98B-7.02B
Balance SheetCash, Cash Equivalents and Short-Term Investments
16.77B19.14B14.76B11.34B16.17B
Total Assets
101.58B91.74B88.05B92.56B86.08B
Total Debt
73.72B59.91B52.78B53.53B59.56B
Net Debt
58.74B45.72B40.32B44.85B45.70B
Total Liabilities
105.85B88.46B81.94B86.36B89.95B
Stockholders Equity
-4.78B3.99B7.32B7.87B-2.20B
Cash FlowFree Cash Flow
-1.33B-6.80B4.10B11.37B3.53B
Operating Cash Flow
2.44B-2.27B8.95B14.79B6.29B
Investing Cash Flow
-3.48B-4.53B-4.95B-3.38B-2.72B
Financing Cash Flow
469.00M8.87B225.00M-16.97B2.17B

Braskem SA Technical Analysis

Technical Analysis Sentiment
Positive
Last Price3.82
Price Trends
50DMA
3.66
Positive
100DMA
3.93
Negative
200DMA
4.82
Negative
Market Momentum
MACD
<0.01
Positive
RSI
53.14
Neutral
STOCH
24.03
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 3.82 is above the 20-day moving average (MA) of 3.74, above the 50-day MA of 3.66, and below the 200-day MA of 4.82, indicating a neutral trend. The MACD of <0.01 indicates Positive momentum. The RSI at 53.14 is Neutral, neither overbought nor oversold. The STOCH value of 24.03 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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 (51)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
72
Outperform
$781.59M14.8810.22%8.50%-6.76%-3.19%
DODOW
65
Neutral
$20.18B71.361.60%9.53%-2.08%-76.11%
CECE
56
Neutral
$6.07B6.84-26.94%2.56%-5.98%-183.27%
HUHUN
54
Neutral
$1.98B-4.46%8.79%0.02%-43.65%
51
Neutral
$930.17M-8.44%8.35%4.15%57.25%
51
Neutral
$2.04B-1.15-21.37%3.64%2.88%-30.57%
BABAK
46
Neutral
$1.54B-8638.28%0.81%-34.74%
* Basic Materials Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
BAK
Braskem SA
3.82
-2.99
-43.91%
CE
Celanese
59.36
-83.95
-58.58%
HUN
Huntsman
12.10
-10.84
-47.25%
TROX
TRONOX
6.12
-12.23
-66.65%
WLKP
Westlake Chemical PRN
22.28
1.46
7.01%
DOW
Dow
30.70
-21.56
-41.26%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

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.