10 Most Undervalued Oil Stocks To Buy According To Analysts

9. Petróleo Brasileiro – Petrobras (NYSE:PBR)

Forward Price-to-Earnings Ratio: 5.17

Analyst Upside: 37.41%

Number of Hedge Fund Holders: 33

Petróleo Brasileiro – Petrobras (NYSE:PBR) is one of the 10 most undervalued oil stocks to buy according to analysts. Citi analysts maintained their Neutral rating for Petróleo Brasileiro – Petrobras (NYSE:PBR) with a price target of $12.50 on June 2. This move comes after Petrobras informed fuel distributors that gasoline prices would be lowered by 5.6%. In keeping with a trend of declining oil prices, the price will drop from R$3.02/L to R$2.85/L.

This marks the most recent price change since July 2024. Currently, domestic gasoline prices are 2% higher than international parity, according to the Brazilian Association of Fuel Importers (ABICOM). That said, prices are expected to fall below international parity pricing as a result of the recent drop.

Although the move could adversely impact Petrobras’s revenue and EBITDA, possibly by about $690 million a year, Citi analysts pointed out that it might also have mixed effects on the fuel distribution industry. In addition to potentially affecting working capital investments and decreasing smaller distributors’ competitiveness, the reduced gasoline price may also have a negative inventory impact on second-quarter EBITDA margins.

Petróleo Brasileiro – Petrobras (NYSE:PBR) is an energy company under Brazilian government control that is involved in the exploration, production, refining, and marketing of oil and gas. It is divided into three sections: Gas & Power, Refining & Marketing, and Exploration & Production.