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The 2014 All-Brazil Research Team: Chemicals & Oil, No. 1: Paula Kovarsky

Paula Kovarsky Itaú BBA First-place appearances: 2

Total appearances: 7

Team debut: 2008

After three years at No. 2 on this list, Itaú BBA researcher Paula Kovarsky reclaims first place. “Paula is excellent,” declares one client of the São Paulo–based analyst. “She is very diligent.” In this diverse sector, performance of Brazil’s chemicals and oils companies is driven by company specifics, says Kovarsky, 39. For instance, São Paulo–based natural gas and oil producer Petróleo Brasileiro, better known as Petrobras, is sensitive to changes in the political climate. Petrobras has “enjoyed a very strong performance following election polls, as the opposition has been gaining momentum,” she notes. “Although turning this huge ship around is not an easy task and will take time, we believe a change in elections can change market perception to the best, while improving the company’s economics quite significantly.” Petrobras’s stock price will continue to be heavily influenced by the October presidential elections, she believes. On the contrary, Ultrapar Participações in Rio de Janeiro is little influenced by changes in the political arena, Kovarsky advises. The gas distribution and petrochemicals provider’s fundamentals are strong enough to support higher earnings expansion beginning in the third quarter, she believes, despite management’s guidance for lower earnings growth in the preceding period. The second-quarter slip will be attributable to one-off items, she explains, so “from the third quarter of 2014 on, we believe, the yearly [earnings] growth rate will resume the expected 15 percent level, supporting a better stock performance.”

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