Vale: Operational Outperformance and Attractive Valuation Support Buy Rating and Higher Target Price

In a report released today, Alexander Pearce from BMO Capital reiterated a Buy rating on Vale SA, with a price target of $18.00.

Alexander Pearce has given his Buy rating due to a combination of factors that highlight both operational strength and valuation appeal at Vale. He notes that the iron ore business ended the year solidly, with production and sales broadly matching expectations and slightly exceeding company guidance on an annual basis, while realized prices held steady. At the same time, the base metals segment outperformed, with copper and nickel volumes surpassing forecasts and guidance, driven in particular by record output at Salobo and a successful ramp-up at Onça Puma. This operational momentum leads him to make modest upward revisions to near‑term estimates and to expect continued improvements through 2026.

Pearce points out that Vale’s reaffirmed 2026 production guidance across key commodities, combined with incremental upgrades to copper forecasts, supports an outlook of roughly 10% EBITDA growth. On his updated numbers, Vale trades at about 5x EV/EBITDA with a dividend yield around 6%, levels he views as compelling versus peers. Strong cash generation from both iron ore and base metals also creates scope for potential special dividends or a restart of share buybacks. Taken together, these factors underpin his view that Vale offers attractive risk‑reward, justifying a Buy rating and a higher target price of US$18.

In another report released today, Jefferies also reiterated a Buy rating on the stock with a $20.00 price target.