Petrobras (PBR) CEO Ousted Again Over Rising Fuel Prices

The Brazilian President, Jair Bolsonaro, recently sacked Jose Mauro Coelho, the chief executive officer (“CEO”) of the state-run oil giant Petrobras PBR, less than two months into the job after the company declined to sell fuels at a subsidized rate to consumers cautioning it would lead to shortages. However, this latest development raised concerns regarding the continued political interference at the company and the instability that it is creating.

Bolsonaro also called for the election of a new board at Petrobras, paving the way to a complete executive revamp. This shake-up is said to be the President’s latest move to influence PBR’s pricing policies and improve his re-election prospects later this year amid the surging inflation driven by rising energy prices.

The outgoing CEO will be replaced by the senior Brazilian economy ministry official, Caio Mario Paes de Andrade, who is set to be the next top executive of Petrobras. Paes de Andrade will become Petrobras’ fourth chief executive in the last two years.

Previously, Paes de Andrade advised Brazil’s economy minister, Paulo Guedes, on digital governance and had been in the race for the chief executive job at the beginning of April when Jose Mauro Coelho was picked for the role. However, Paes de Andrade will first have to be elected to the company’s board as rules allow only board members to be appointed as CEO.

Brazil’s mines and energy ministry stated while declaring the leadership change that the country is confronting extreme volatility in the oil and gas market along with geopolitical challenges. Moreover, neither it specified the reason for Coelho’s ouster nor mentioned when the new chief will officially take over.

Headquartered in Rio de Janeiro, Petroleo Brasileiro S.A. or Petrobras S.A. is the largest integrated energy firm in Brazil and one of the largest in Latin America. PBR’s activities include the exploration, exploitation and production of oil from reservoir wells, shale and other rocks as well as refining, processing, trading and transportation.

Petrobras currently sports a Zacks Rank #1 (Strong Buy). Other similar-ranked stocks from the energy space that warrant a look include Oasis Petroleum OAS, Earthstone Energy ESTE and Murphy USA MUSA. You can see the complete list of today’s Zacks #1 Rank stocks here.

Oasis Petroleum’s stock has gone up 83.9% in a year. Oasis Petroleum beat the Zacks Consensus Estimate for earnings in three of the trailing four quarters, the average being around 19.6%.

The Zacks Consensus Estimate for OAS’ 2022 earnings is projected at $37.09 per share, up about 289.6% from the projected year-ago earnings of $9.52.

The Zacks Consensus Estimate for Earthstone’s 2022 earnings has been revised upward by about 41.8% over the past 60 days from $2.80 to $3.97 per share. Earthstone’s stock has increased 80.7% in a year.

The Zacks Consensus Estimate for ESTE’s 2022 earnings is projected at $3.97 per share, up about 217.6% from the projected year-ago earnings of $1.25.

Murphy USA is valued at around $5.92 billion. The Zacks Consensus Estimate for Murphy USA’s 2022 earnings per share has been revised upward by about 47.3% over the past 60 days from $11.42 to $16.82.

Murphy USA beat the Zacks Consensus Estimate for earnings in all the trailing four quarters, the average being 49.1%. MUSA stock has increased 84% in a year.

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