Braskem stock price target raised to $3.70 from $3.10 at BofA on tax benefits

Investing.com - BofA Securities raised its price target on Braskem S.A. (NYSE:BAK) to $3.70 from $3.10 while maintaining a Neutral rating on the stock. The new target represents a 20% upside from the current price of $3.09, though InvestingPro data indicates the stock is currently trading above its Fair Value.

The price target increase follows the Senate’s approval of PL 892/2025 on Wednesday, which establishes tax benefits through the REIQ/Presiq special regimes.

BofA has incorporated these tax advantages into its financial model for the Brazilian petrochemical company, resulting in higher EBITDA forecasts.

The bank now projects Braskem’s EBITDA to reach $1.4 billion in 2026-27 and $1.6 billion in 2028, representing increases of 23-32% compared to previous estimates.

Despite the improved outlook driven by the tax benefits, BofA Securities maintained its Neutral rating on Braskem shares. This cautious stance aligns with InvestingPro data showing Braskem operates with a significant debt burden and has a "WEAK" overall financial health score. For investors seeking deeper insights, InvestingPro offers additional ProTips and comprehensive metrics on Braskem’s financial position.

In other recent news, Braskem S.A. has announced a significant investment of approximately R$4.2 billion to expand its petrochemical plant in Rio de Janeiro. This expansion aims to increase ethylene production by 220 thousand tons per year, with an expected completion by the end of 2028. The company also reported the withdrawal of a $1 billion stand-by credit facility, bringing its total available cash to $2.3 billion as of September 30, 2025. Additionally, Braskem received approval from Brazil’s Administrative Council for Economic Defense (CADE) for a proposed transaction involving NSP Investimentos and the Petroquímica Verde Fund, although negotiations are still ongoing.

In another development, Fitch Ratings and S&P Global Ratings have downgraded Braskem’s global corporate credit ratings to CCC+ and CCC-, respectively, both with a negative outlook. The company has engaged financial and legal advisors to explore financial alternatives to optimize its capital structure amid a prolonged downturn in the chemical industry. These recent developments reflect Braskem’s strategic efforts to navigate current industry challenges and strengthen its financial resilience.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.