UPDATE: Credit Suisse Upgrades Petrobras as Stock is Cheap Enough

In a report published Wednesday, Credit Suisse analyst Vinicius Canheu upgraded the rating on

from Underperform to Neutral, and reiterated the $14.00 price target. In the report, Credit Suisse noted, “Even in a scenario where the FX depreciates further to 2.6x and we see ‘only' 10% price hikes in 2015, PBR could be a close to 6.0x PE stock on reasonably conservative earnings. With the company recently going to the debt markets and raising c.$13bn YTD, capital needs are nearly solved for 2014, decreasing the fears of further equity dilution this year (though cheap debt also has an indirect psychological negative effect of removing the sense of urgency to increase gasoline and diesel prices). "2014 is still a very tough year full of macro uncertainties (FX, elections, Brazilian debt downgrade?), and we are not yet seeing operational improvements in the business. We cannot see what would urge investors to buy yet, but PBR is now cheap enough to warrant a Neutral position.” Petrobras closed on Tuesday at $10.68.