Petróleo Brasileiro S.A. - Petrobras (PBR): fair value, margin of safety and Wheel Score

Is PBR undervalued?

Petróleo Brasileiro S.A. - Petrobras (PBR) closed at 25.94 on 16 Oct 2026. The GLS average fair value - the simple average of the 9 valuation models that produced a positive number - is 115.09, which puts the price 77% below it. 7 of the 9 models value the shares above the current price. A gap this wide is rare in our universe of ~7,400 US stocks and is exactly what the Value part of the Wheel Score rewards; it is also where the question "why is it this cheap?" matters most.

The 9 models disagree widely: Lynch gives 0.3567 while 10 Cap gives 432.63. A spread that wide means the average is sensitive to which methods you trust; the model table below shows where each one lands, and the Quote page lets you switch any of them off.

The nightly engine files PBR under High Yield Income: a dividend yield above 4%.

Nine valuation models for PBR

Each model turns the latest filed numbers into a value per share; the GLS fair value is the simple average of the ones that produce a positive number. The last two rows are shown for reference and never enter the average. The Quote page lets you switch any model off and add your own margin of safety.

Quality and financial health

On financial health PBR scores 8/9 (Piotroski): most of the nine tests - positive earnings and cash flow, falling debt, rising margins and turnover - are passed, which is the kind of balance sheet a wheel trader is happy to be assigned. The GLS Moat score is low at 4.6 out of 10, which says the ten-year record of revenue, earnings, margins and returns on capital has been inconsistent - growth and shocks rather than steady compounding.

Returns on capital are high - ROIC 13.5%, ROE 26.0%, ROA 8.8% - with debt at 0.92 times equity and a free-cash-flow yield of 11.6%.

The dividend yield is high at 5.62% (payout ratio 28%). A yield this size is often the market's way of pricing a risk to the payout, so the health score and cash flow matter more than usual. Revenue comes mainly from Oil Products 100% (fiscal year FY2019).

Institutional ownership scores 2/10, insider activity 10/10 and Congressional trading 5/10 on the GLS smart-money scales.

Wheel Score 90: Prime

PBR scores 90 out of 100 on the Wheel Score, in the Prime band (80 and above), which fewer than one stock in twenty reaches on any night. The score blends five things a wheel trader checks before selling a cash-secured put: the margin of safety (Value, 25/25), Piotroski health (18/20), the GLS moat (7/15), the option premium on offer (20/20) and how easily the stock trades (20/20).

Implied volatility is 50% on the near-the-money contracts 20-60 days out - inside the 35-60% range the Wheel Score pays full marks for: enough premium to be worth selling, not so much that the risk is unpaid. The option chain is deep: 2,383,240 contracts of open interest across all expiries, which means tight fills at most strikes.

Volume runs at 19.7M shares a day on a market cap of $167.2B, with a beta of -0.22 - a low beta, so day-to-day moves are smaller than the market's; the Stability part of the Wheel Score gives that 20 of 20.

The Wheel Score ranks ~7,400 US stocks for selling cash-secured puts and covered calls; it is updated nightly and is not a recommendation. The walkthrough lesson shows how the score fits into a trade, start to finish.

Upcoming events

The next earnings report is due on 10 Nov 2026 (after the close), 25 days away; a 30-45-day put sold today would expire after it, which is worth weighing against the premium.

Earnings, dividend, IPO, split and economic calendars for the whole market, filterable to your watchlists.

Similar stocks in Oil & Gas Integrated

The 12 companies below are the closest to Petróleo Brasileiro S.A. - Petrobras by market cap within the Oil & Gas Integrated industry, each with its own fact sheet; the Compare page puts up to eight of them side by side.

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