BRAV, PRIO & RECV: Model Update & 2Q26 Preview

Research evidence excerpt

BRAV, PRIO & RECV: Model Update & 2Q26 Preview

Update

July 28, 2026 10:01 PM GMT

Morgan Stanley C.T.V.M. S.A.+MLatAm E&P | Latin America Bruno Montanari

Equity Analyst

BRAV, PRIO & RECV: Model Bruno.Montanari@morganstanley.comThiago S Casqueiro +55 11 3048-6225

Research Associate

Thiago.Casqueiro@morganstanley.com +55 11 3048-9507

Update & 2Q26 Preview Luiza B Belem

Luiza.Belem@morganstanley.com +55 11 3048-4276

What’s Changed

LatAm E&P

PetroReconcavo S.A. (RECV3.SA) From To Latin America

Price Target R$12.50 R$12.00 Industry View Attractive

PRIO SA (PRIO3.SA)

Price Target R$71.00 R$70.00

We are updating our estimates for PRIO, BRAV, and RECV to reflect: (i) reported FX

and Brent prices for 2Q26; and (ii) reported production figures for the quarter. As a

result, we made the following revisions:

PRIO: Our 2Q26 EBITDA estimate remains broadly unchanged versus our previous

assumptions (-0.1%). However, we reduce our 2026 EBITDA estimate by 2.1% to

reflect the extension of the 12% export tax. We also fine-tuned our capex

assumptions to better capture the activities carried out during the quarter. We

lower our price target to R$70/sh (from R$71/sh).

BRAV: We reduce our 2Q26 EBITDA estimate by ~19%, reflecting adjustments to

our lifting cost estimates, to reported production data and by adjusting revenues to

account for the company's 62.5% interest in Papa Terra, rather than our previous

assumption of 100% (while the arbitration against NTE remains open). Despite the

quarterly revision, our full-year 2026 EBITDA estimate is broadly unchanged (-0.7%

versus our previous forecast). Our price target remains R$23/sh, as we believe EC's

tender offer at this level should continue to provide a near-term valuation anchor.