Why did JPMorgan downgrade Braskem's rating and cut its target price in half?

JPMorgan downgraded Braskem’s rating from 'overweight (buy)' to 'neutral' and slashed its target price from 15 to 7.5 Brazilian reais due to rapidly deteriorating operating prospects, a 20.1% downward revision in its 2026 core earnings forecast to $2.2 billion — aligning with implied values in the company’s restructuring documents — and the erosion of the prior bullish thesis anchored on sustained high chemical processing margins, which collapsed following the de-escalation of Middle East conflict and the U.S.-Iran memorandum of understanding that lowered market expectations for the long-term margin baseline.

What key financial and strategic assumptions underpin JPMorgan’s revised outlook for Braskem?

JPMorgan’s revised outlook rests on three core assumptions explicitly stated in the report: first, Braskem’s updated corporate charter and shareholder agreement, while improved over the prior structure, are insufficient to offset deteriorating fundamentals; second, chemical processing margins — though still above pre-conflict levels — are no longer expected to sustain their elevated trajectory, as geopolitical normalization has reset market expectations for the industry’s profit margin center; and third, the current earnings and valuation assessment excludes potential equity dilution from future capital raises, meaning the fair value could decline further if share issuance proceeds.

JPMorgan Downgrades Braskem Rating Again

Jul 8, 2026

JPMorgan downgraded Brazilian petrochemical giant Braskem to Neutral, halving its target price and cutting 2026 earnings forecasts by 20% due to declining chemical margin expectations post-geopolitical shifts.

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