BTG Pactual investment bank cut their recommendation for Petrobras stock to neutral due to the limited impact of the recent increase in Brazilian fuel prices.
Petrobras last month raised gasoline prices at its refineries by 6.6 percent and diesel by 5.4 percent.
BTG Pactual analyst Gustavo Gattass said in a note to clients that the increases were not enough to cover the state-led oil giant's losses from selling subsidized fuel.
"While it was good to see some action on the fuel price front, we fear the small magnitude of the increase is a signal that Petrobras' board does not share our sense of urgency with regards to the deterioration of the company's balance sheet."
"We are not downgrading Petrobras to Sell on the hope that more small increases could come in coming months. Our target is cut to $20/ADR," Gattass said.