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Is this Large Market Cap Stock target price reasonable for Braskem S.A. (NYSE:BAK)?

The company in question is, Braskem S.A. (NYSE:BAK) currently with a stock price of 17.02 (3.21% today). The market cap for Braskem S.A. is 6087.28, and is in the sector Basic Materials, and Chemicals – Major Diversified industry. The target price for Braskem S.A. is 16. Currently Braskem S.A. is trading with a P/E of 7.11, and a forward P/E of 10.54. Average volume for Braskem S.A. is 454.07 and so far today it is 493230.

Performance in the last year for Braskem S.A. has been 85.67%. For EPS growth, Braskem S.A. has seen a growth of 263.50%, and is looking to grow in the next year to -18.46%. More long term stats show that EPS growth has been 8.30% over the last five years and could be *TBA for the next five years. Braskem S.A. has seen sales growth quarter over quarter at 2.50%, with EPS growth quarter over quarter at -62.30%. The 20-day simple moving average is 23.98%, with the 200-day simple moving average coming to 40.88%.

Since the IPO date for Braskem S.A. on the 1/13/1999, Braskem S.A. has seen performance year to date to be 35.48%. With Braskem S.A. trading at 17.02, the dividend yield is 9.40%, and the EPS is 2.32.

So could Braskem S.A., be undervalued? Well as said before P/E is 7.11. The PEG is *TBA, P/S is 0.4 and the P/B is at 3.69. The P/cash is 2.74, with P/free cash flow at 10.77.

Braskem S.A. ability to deal with debt shows that the current ratio is 1.2, and the quick ratio is 0.8. This is with long term debt/equity at 5.66, and total debt/equity at 6.2.

In terms of margins, Braskem S.A. has a gross margin of 25.30%, an operating margin of 17.80% and a profit margin of 6.00%.Payout ratio for Braskem S.A. is 33.60%. Return on assets come to 5.20% with return on investment coming to 12.50%.

Insider ownership for Braskem S.A., is at 77.50% and institutional ownership comes to 7.40%. Outstanding shares are at 369.15. While shares float is 93.48. The float short is currently 2.07%, and short ratio is 4.26.

Disclaimer: Remember there is a risk to your investment, this is not a recommendation, nor personal advice, never invest more than you are able too loose.

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Mark Hines

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