What are the main drivers behind JPMorgan's upgraded outlook for Braskem in 2026?

JPMorgan attributes Braskem's improved 2026 outlook to three core factors: tightening global supply chains and favorable spread dynamics driven by the US-Iran conflict—particularly its impact on ethylene and polyethylene capacity near the Strait of Hormuz (9% of global capacity), which reduced competition and lifted operating rates; a governance overhaul following Novonor’s divestment of its controlling stake and the new consensus-based management agreement between IG4 and Petrobras, ensuring joint oversight and strategic alignment; and supportive Brazilian government tax policies, including the expanded REIQ feedstock credit scheme (from 0.73% to 5.8%) and the upcoming PRESIQ programme (2027–2031) offering industrial and investment credits.

How does JPMorgan assess Braskem’s corporate governance changes and their implications?

JPMorgan views Braskem’s post-Novonor governance structure as a decisive improvement over the prior arrangement, highlighting that executive appointments and major board/shareholder decisions now require consensus between IG4 and Petrobras—ending Novonor’s unilateral board control and strengthening Petrobras’ influence; the agreement includes a two-year lock-up, a commitment to pursue a Novo Mercado listing upon achieving financial targets, and mandatory tag-along rights for all shareholders in case of a change of control—enhancing minority shareholder protections and aligning with higher corporate governance standards.

Brazil’s Braskem fortunes to markedly improve in 2026 on margin tailwinds, governance shift – bank

May 13, 2026

JPMorgan upgraded Braskem to 'Overweight', citing improved 2026 financials driven by global supply tightness and governance restructuring. The bank raised its share price target by nearly 50% amid favorable polyethylene and polypropylene spread dynamics.

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