Braskem Margin Tailwinds Unleashed - Upgrade to OW

Research evidence excerpt

Braskem Margin Tailwinds Unleashed - Upgrade to OW

J P M O R G A N Latin America Equity Research

12 May 2026

Braskem ▲Overweight

Previous: Neutral

Margin Tailwinds Unleashed - Upgrade to OW BRKM5.SA, BRKM5 BZ

Price (11 May 26):R$9.20

▲Price Target (Dec-26):R$15.00

Prior (Dec-26):R$10.50

We upgrade Braskem to Overweight, reflecting improved market ▲Overweight

fundamentals, tighter supply, and strengthened governance post- Previous: Neutral

restructuring. Braskem is set for a stronger 2026, as global market challenges and BAK, BAK US

logistics constraints in the Middle East have tightened petrochemical supply and Price (11 May 26):$3.80

supported margin improvement. We expect normalization across the Price Target (Dec-26):$5.50

petrochemical chain to take several months, given ongoing facility disruptions and

longer logistics lead times. Looking ahead to 2027, Braskem’s financial Latam Oil, Gas & Petrochemicals

performance should return to mid-cycle levels, although the lasting effects of the AC Milene Clifford Carvalho

conflict and supply chain adjustments remain key variables. While the reopening (55-11) 4950-3475

of the Strait of Hormuz could temper upside, we are confident that Braskem’s milene.carvalho@jpmorgan.com

strengthened governance post-restructuring and improved fundamentals are only Banco J.P. Morgan S.A.

partially reflected in the BRKM 17% YTD increase. Incorporating the latest CMA

estimates for 2026-2028, we raise our December 2026 price target from R$10.50/

share to R$15.00/share (BAK to $5.50/ADR), reflecting stronger governance Figure 16: After a painful normalization

standards and a 118% higher EBITDA expectation supported by spreads tailwinds. trend, PE prices recovered amid Iran

conflict.