Vale Upgraded to Outperform at RBC Capital
RBC Capital analysts upgraded Vale S.A. (NYSE:VALE) to Outperform from Sector Perform, setting a new price target of $15.00 (previously $13.00). The firm anticipates a further decline in iron ore prices to reach cost support levels of $75-$80/t in the upcoming years.
Despite the unfavorable impact on Vale and its iron solutions business, the analysts mentioned that the current price reflects a long-term iron ore value of approximately $75/t. Given its recent underperformance, Vale is well-positioned to benefit from a potential sector rebound driven by stimulus expectations. Additionally, the analysts noted that the sale of its base metals stake could initiate a series of positive catalysts.
| Symbol | Price | %chg |
|---|---|---|
| RIO.BA | 10650 | 0 |
| UNTR.JK | 27275 | 0 |
| CUAN.JK | 7000 | 0 |
| MDKA.JK | 2680 | 0 |
Vale S.A. Upgraded to Sector Perform at RBC Capital
The company's weak Q3 results reported in Nov 1 and Vale Day guidance saw Vale S.A. (NYSE:VALE) shares sell off and consensus earnings fall, but the rally in iron ore prices has since provided some support.
Analysts at RBC Capital increased their long-term iron ore price forecasts to $75/t from $65/t. This and a weaker BRL assumption helps to increase their NAV estimate by 39% to $20.49/share. The analysts believe Brazil risks, its EM link, and concentration in iron ore will continue to see shares discounted, however, the stock should be more resilient into future iron ore downturns. The analysts upgraded the company to sector perform from underperform, raising their price target to $17 from $12.50.
