Petróleo Brasileiro S.A. (NYSE: PBR), known as Petrobras to most U.S. investors, may finally be closer to a bottom in its stock price. While U.S. oil giants have hung in there, Petrobras shares just seem to keep rolling over with lower and lower share prices for its American depository receipts (ADRs) in New York trading. The latest hit to the stock was last week when the Brazilian oil giant denied a tax injunction, making it in ineligible in government tenders coming up in October. Jefferies is coming to the rescue for Petrobras with what looks and feels like a bottom-fishing analyst upgrade.

Jefferies raised the official rating to Buy from Hold, because its upstream progress looks encouraging. The firm thinks that Petrobras may meet its production targets. There is even hope that the recent price hikes in the downstream assets imply that government will allow Petrobras to have lower losses than it has seen. Jefferies also sees a negative free cash flow gap closing in the next three or four years.

Petrobras also has an U.S. Securities and Exchange Commission (SEC) filing out indicating that its board of directors approved the restructuring of its petrochemical portfolio last week, as well as the subsequent merger of its wholly-owned subsidiaries. The move will be submitted to a vote by shareholders in the near future.

Petrobras ADRs are up 1.6% at $15.89 after an hour of trading on Monday, against a 52-week trading range of $14.40 to $24.83. The consensus analyst price target is represented as $25.31 according to Thomson Reuters.

As a reminder, Petrobras shareholders are not really in control here as the company is effectively government dominated, and also given solid ownership by its labor groups.

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