Shares of Braskem plunged as much as 9.93% to BRL 4.81 on September 16 after UBS downgraded the stock to Sell from Neutral and slashed its price target by 64% — from BRL 10.50 to BRL 3.75 — signaling that the bank sees another 22% downside from today's already battered levels. The move marks one of the sharpest single-analyst repricing events for the Brazilian petrochemical giant in recent memory and raises urgent questions about whether the company's restructuring can outrun a hostile commodity cycle. UBS Cuts Braskem to Sell and Sees 22% More Downside — Is Latin America's Plastics Giant Running Out of Road?
Shares of Braskem cratered nearly 10% to BRL 4.81 on September 16 after UBS downgraded the stock to Sell and slashed its price target by 64%, from BRL 10.50 to BRL 3.75. The call implies another 22% decline from here. For investors in Latin America's largest plastics maker, the question is no longer whether a recovery is coming — it's whether the company can survive long enough to see one.
The Spread Boom Was Temporary, and UBS Thinks It's Already Fading
Braskem posted $1.04 billion in recurring EBITDA in Q2 2026, boosted by wider petrochemical spreads — the gap between what it pays for raw materials and what it sells finished plastics for — following Middle East supply disruptions. But the company itself called this improvement "tactical rather than evidence of a structural recovery," warning that overcapacity and moderate demand would reassert pressure.
Global operating rates for polyethylene are projected at just 77% in 2026 and 76% in 2027, while polypropylene rates sit at 73% and 72% — well below historical averages. UBS appears to be pricing in the normalization Braskem's own management predicted.
$10.9 Billion in Debt and Only 39.6% of Creditors on Board
Braskem's board approved an out-of-court restructuring plan on August 24 covering $10.9 billion in unsecured debt — a process similar to a prepackaged bankruptcy in the U.S.
But the parties remain far apart on key issues, and only about 39% of creditors agreed to keep talks going for 90 days.
Leverage closed Q2 at a staggering 6.74x net debt to EBITDA. That ratio needs spreads to stay elevated — precisely what UBS doubts will happen.
Index Removal Compounds the Liquidity Problem
Brazil's B3 exchange removed Braskem shares from 17 indices starting August 26, following the restructuring filing. Index deletion forces passive funds to sell, thinning out the buyer base at the worst possible time and amplifying downside volatility.
The Iran Peace Deal Changes the Math
Braskem had been pushing to increase production even as prices fell in the wake of the U.S.-Iran peace deal, betting that damaged Middle East plants would take 12–18 months to restart. If that timeline compresses, Braskem's spread advantage evaporates — and with it, any hope of deleveraging its way out of a near-bankruptcy balance sheet.