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Braskem Sa (BAK)
:BAK
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Braskem SA
(NYSE:BAK)
Rating:41Neutral
Price Target:
$3.00
▼(-12.02%Downside)
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)
Market Cap
$1.40B
Dividend YieldN/A
Average Volume (3M)972.40K
Price to Earnings (P/E)―
Beta (1Y)0.92
Revenue Growth0.81%
EPS Growth-34.74%
CountryUS
Employees8,569
SectorBasic Materials
Sector Strength70
IndustryChemicals
Share Statistics
EPS (TTM)0.30
Shares Outstanding172,530,200
10 Day Avg. Volume874,777
30 Day Avg. Volume972,397
Financial Highlights & Ratios
PEG Ratio0.22
Price to Book (P/B)2.65
Price to Sales (P/S)0.00
P/FCF Ratio4.72
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$4.75Price Target Upside39.30% Upside
Rating ConsensusHold
Number of Analyst Covering2
Braskem SA Business Overview & Revenue Model
Company DescriptionBraskem SA is a leading global petrochemical company headquartered in Brazil. It operates in the chemical and petrochemical sectors, specializing in the production of thermoplastic resins. The company's core products include polyethylene, polypropylene, and PVC, which are essential for various industries including automotive, packaging, and construction. Braskem is committed to sustainable development and innovation, continuously working towards enhancing its product offerings and reducing its environmental impact.
How the Company Makes MoneyBraskem SA makes money by producing and selling a wide range of thermoplastic resins and other chemical products. The company's revenue streams are primarily derived from the sale of polyethylene, polypropylene, and PVC, which are used in numerous applications such as packaging, automotive parts, household goods, and construction materials. Braskem benefits from its extensive production capabilities, strategic global locations, and strong supply chain network, which allow it to efficiently meet the demands of various industries. Additionally, the company engages in strategic partnerships and joint ventures to expand its market reach and drive growth. Braskem's focus on innovation and sustainability also plays a crucial role in attracting and retaining customers who are increasingly seeking environmentally friendly solutions.
Braskem SA Earnings Call Summary
Earnings Call Date:May 09, 2025
(Q1-2025)
| % Change Since: -13.67%|
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
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.40
Negative
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.30
Negative
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.45
Neutral
| 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
Negative
3.41
Price Trends
3.67
Negative
3.75
Negative
4.58
Negative
Market Momentum
-0.11
Positive
44.83
Neutral
44.50
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For BAK, the sentiment is Negative. The current price of 3.41 is below the 20-day moving average (MA) of 3.52, below the 50-day MA of 3.67, and below the 200-day MA of 4.58, indicating a bearish trend. The MACD of -0.11 indicates Positive momentum. The RSI at 44.83 is Neutral, neither overbought nor oversold. The STOCH value of 44.50 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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 (43)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
71 Outperform | $791.46M | 15.07 | 10.22% | 8.43% | -6.76% | -3.19% | |
60 Neutral | $20.12B | 71.13 | 1.60% | 9.74% | -2.08% | -76.11% | |
56 Neutral | $6.66B | 6.84 | -26.94% | 0.20% | -5.98% | -183.27% | |
53 Neutral | $884.22M | ― | -8.44% | 9.04% | 4.15% | 57.25% | |
46 Neutral | $1.93B | ― | -4.46% | 8.83% | 0.02% | -43.65% | |
43 Neutral | AU$1.42B | -6.13 | -40.62% | 4.05% | -4.78% | -42.91% | |
41 Neutral | $1.40B | ― | -8638.28% | ― | 0.81% | -34.74% |
* Basic Materials Sector Average
Performance Comparison
BAK
Braskem SA
3.41
-3.40
-49.93%
CE
Celanese
60.88
-71.53
-54.02%
HUN
Huntsman
11.11
-9.33
-45.65%
TROX
TRONOX
5.58
-9.92
-64.00%
WLKP
Westlake Chemical PRN
22.46
1.28
6.04%
DOW
Dow
28.46
-20.68
-42.08%
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.