Vale SA (VALE) AI Stock Analysis

• Market Cap: $44.34B
• Dividend Yield: 7.67%
• Average Volume (3M): 31.70M
• Price to Earnings (P/E): 8.6
• Beta (1Y): 0.73
• Revenue Growth: -12.89%
• EPS Growth: -46.86%
• Country: US
• Employees: 64,616
• Sector: Basic Materials
• Sector Strength: 66
• Industry: Industrial Materials
• EPS (TTM): 0.50
• Shares Outstanding: 4,539,008,000
• 10 Day Avg. Volume: 20,655,722
• 30 Day Avg. Volume: 31,697,165
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 1.24
• Enterprise Value/Revenue: 1.48
• Enterprise Value/Gross Profit: 4.17
• Enterprise Value/Ebitda: 4.07
• 1Y Price Target: $11.65
• Price Target Upside: 11.48% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 10

• Rating: 74 Outperform
• Price Target: $11.00 ▲(5.26% Upside)

Vale's overall stock score is primarily driven by a strong earnings call performance and attractive valuation metrics. The solid financial stability is offset by challenges in free cash flow and revenue growth. While technical analysis is neutral, the company's strategic focus on operational efficiency and cost reduction is promising for future performance.

Positive Factors

Analyst Rating

Analyst maintains a Buy rating on Vale SA stock, finding it attractively valued at 4.2x EV/EBITDA and generating a 9.3% free cash flow.

Copper Expansion

Vale aims to more than double its copper output over the next decade, potentially increasing its market capitalization.

Iron Ore Sales

Iron ore sales, including pellets and ROM, were 1.8% above the model and consensus, indicating strong performance in sales.

Negative Factors

Investor Concerns

Investors are unlikely to pay up-front for growth projects due to uncertainties related to execution, environmental permitting, social licenses, and the regulatory framework.

Nickel Production

The pure nickel assets continue to burn cash due to ongoing oversupply and price pressure.

Pellet Production

Pellet production dropped significantly both quarter over quarter and year over year, impacted by lower production in Tubarão and high rain levels.

Vale SA Business Overview & Revenue Model

Company Description

Vale SA (VALE) is a global mining company headquartered in Brazil, primarily engaged in the production and export of iron ore and nickel. As one of the world's largest producers of iron ore, Vale operates extensive mining operations in Brazil, Canada, and several other countries. In addition to iron ore and nickel, the company also produces copper, coal, and various other minerals, as well as offering logistics services to support its mining operations. Vale is a key player in the metals and mining sector, focusing on sustainable practices and innovation in resource extraction.

How the Company Makes Money

Vale generates revenue primarily through the sale of iron ore and nickel, which are essential raw materials for steel production and various industrial applications. The company has a diversified revenue model, with significant contributions from its copper and coal operations as well. Vale's revenue is heavily influenced by global commodity prices, which fluctuate based on supply and demand dynamics in the market. Additionally, the company benefits from long-term contracts and partnerships with major steel producers, ensuring a steady demand for its products. Vale also engages in logistics services, enhancing its operational efficiency and providing additional revenue streams through transportation and shipping solutions.

Vale SA Financial Statement Overview

Summary

Vale SA demonstrates solid profitability and a stable balance sheet but faces challenges in revenue growth and free cash flow generation. The company's margins remain strong, but a recent decline in net profit margin and revenue growth rate suggests potential headwinds. The balance sheet is strong with manageable debt levels, though the decline in ROE warrants attention. Cash flow performance, particularly the significant decline in free cash flow, is a key area for improvement.

Income Statement

Vale SA's income statement shows a mixed performance. The Gross Profit Margin for the TTM is approximately 35.4%, indicating strong profitability in its operations. However, the Net Profit Margin has decreased to 15.6% in the TTM from 16.3% in 2024, suggesting some pressure on net earnings. The Revenue Growth Rate has been negative over the past year at -1.1% from 2024 to TTM, indicating a slight contraction in sales. Overall, the company maintains solid profitability but faces challenges in revenue growth.

Balance Sheet

Vale SA's balance sheet reflects a stable financial position with a Debt-to-Equity Ratio of 0.53 in the TTM, slightly improved from 2024. The company's Return on Equity (ROE) is robust at 16.5%, down from 18.3% in 2024, showing effective utilization of equity though it has decreased. The Equity Ratio stands at 42.2%, indicating a strong equity base relative to its total assets. There is a concern with the reduction in ROE year-over-year, but the company maintains a healthy balance sheet with manageable debt levels.

Cash Flow

Vale SA's cash flow statement highlights some areas of concern. The Free Cash Flow Growth Rate is negative at -54.1% from 2024 to TTM, indicating a significant decrease in cash flow available after capital expenditures. The Operating Cash Flow to Net Income Ratio is healthy at 1.24, suggesting good cash generation relative to net income. However, the Free Cash Flow to Net Income Ratio is lower at 0.19 in the TTM, reflecting constrained free cash flow. The company needs to address the decline in free cash flow to maintain financial flexibility.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	37.20B	37.54B	41.78B	43.84B	54.50B	39.55B
Gross Profit	13.17B	13.60B	17.70B	19.81B	32.77B	21.98B
EBITDA	13.49B	11.07B	15.56B	23.74B	35.76B	14.43B
Net Income	5.82B	5.86B	7.98B	18.79B	22.45B	4.88B
Balance Sheet
Total Assets	83.43B	80.25B	94.19B	86.89B	89.44B	92.01B
Cash, Cash Equivalents and Short-Term Investments	4.00B	5.01B	3.66B	4.80B	11.90B	14.26B
Total Debt	18.55B	17.74B	16.80B	15.44B	17.20B	21.49B
Total Liabilities	47.07B	45.69B	53.20B	49.54B	54.14B	57.19B
Stockholders Equity	35.21B	33.43B	39.46B	35.39B	34.47B	35.74B
Cash Flow
Free Cash Flow	1.15B	2.92B	7.25B	6.04B	20.65B	10.10B
Operating Cash Flow	7.46B	9.37B	13.16B	11.48B	25.68B	14.32B
Investing Cash Flow	-5.22B	-5.79B	-6.49B	-4.69B	-6.61B	-4.67B
Financing Cash Flow	-1.78B	-2.13B	-7.41B	-13.91B	-20.28B	-2.68B

Vale SA Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 10.45
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For VALE, the sentiment is Positive. The current price of 10.45 is above the 20-day moving average (MA) of 10.09, above the 50-day MA of 9.83, and above the 200-day MA of 9.21, indicating a bullish trend. The MACD of 0.17 indicates Negative momentum. The RSI at 67.81 is Neutral, neither overbought nor oversold. The STOCH value of 73.67 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for VALE.

Vale SA Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
BHP	77 Outperform	$138.75B	15.32	19.51%	4.00%	-7.86%	14.17%
RIO	75 Outperform	$107.70B	10.07	18.18%	5.85%	-0.44%	-4.20%
VALE	74 Outperform	$44.34B	8.64	13.49%	7.67%	-12.89%	-46.86%
Sector *	61 Neutral	$10.37B	6.45	-0.08%	2.84%	3.09%	-36.03%
MP	60 Neutral	$11.17B	―	-9.57%	―	39.42%	-172.40%
CMP	48 Neutral	$784.16M	―	-40.17%	1.61%	7.27%	27.35%
NEXA	48 Neutral	$641.00M	―	-9.63%	2.09%	8.66%	66.06%