Petroleo Brasileiro S.A. - Petrobras (PBR)

[eastunder]

Petrobras: UBS Raises To Neutral; Still Worried About Spending.
October 22, 2010, 11:53 AM ET.
By Tiernan Ray

http://blogs.barrons.com/stockstowatchtoday/2010/10/22/petrobras-ubs-raises-to-neutral-still-worried-about-spending/?mod=yahoobarrons

Shares of Petrobras (PBR) are up 9 cents at $32.10, after UBS Securities analyst Lilyanna Yang raised her rating on the stock to “Neutral” from “Sell,” writing that a 13% or so drop in the shares in the last three months offers less downside than previously.

She maintains a $31.69 price target on the stock.

Brazil is heading for a second round of voting on October 31st in its presidential election, and Yang assumes the winner will be Dilma Rousseff, the favorite of current president Luiz Inacio Lula da Silva.

That’s important because state control of Petrobras has been cited by Wall Street as the chief factor in ambitious spending plans by the oil major that could lead to lower returns for shareholders.

A win by Jose Serra, the centrist opposition candidate, would yield more positive developments, writes Yang.

In any event, she’s waiting to get more positive on the stock to see if the company can reign in some of its excessive use of cash, or can outline a better return on invested capital in its downstream operations.