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Vale SA (VALE)
NYSE:VALE
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Vale SA (VALE) AI Stock Analysis

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VALE

Vale SA

(NYSE:VALE)

Rating:74Outperform
Price Target:
$11.00
▲(13.29% 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
Nickel Production
Nickel production was significantly higher than analyst expectations.
Operational Improvement
Analyst maintains a Buy rating recognizing the notable operational improvement and seeing the stock attractively valued.
Stakeholder Relations
Improving relationship with key stakeholders and removal of key overhangs have been noted as key points since the new CEO took office.
Negative Factors
Iron Ore Production
Iron ore production was reported at 67.7 million tons, which was 5.2% below Visible Alpha consensus and 6.4% below Bloomberg consensus.
Nickel Assets
The pure nickel assets continue to burn cash due to ongoing oversupply and price pressure.
Pellet Production
Pellet production dropped significantly year over year, in line with Vale's recently reduced pellets production guidance due to market conditions.

Vale SA (VALE) vs. SPDR S&P 500 ETF (SPY)

Vale SA Business Overview & Revenue Model

Company DescriptionVale 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 MoneyVale 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 Key Performance Indicators (KPIs)

Any
Any
Net Revenue by Segment
Net Revenue by Segment
Reveals revenue contributions from each business unit, indicating which areas are growing, stable, or declining, and providing insight into the company's strategic focus.
Chart InsightsVale's iron ore segment remains a key revenue driver, showing resilience despite declining iron ore prices. The earnings call highlights a 4% increase in production, bolstered by new assets and operational excellence. Nickel and copper segments are gaining momentum with significant production increases, reflecting strategic focus and cost efficiencies. However, challenges persist with lower pellet premiums impacting revenue. Vale's commitment to sustainability and cost reduction initiatives positions it well for future growth, despite market pressures.
Data provided by:Main Street Data

Vale SA Earnings Call Summary

Earnings Call Date:Jul 31, 2025
(Q2-2025)
|
% Change Since: 4.75%|
Next Earnings Date:Oct 31, 2025
Earnings Call Sentiment Positive
Vale's earnings call highlighted significant improvements in safety, production increases in key metals like iron ore, nickel, and copper, and successful cost reduction strategies. Despite a decline in iron ore reference prices and challenges in pellet premiums and regulatory uncertainties, the company demonstrated strong operational and financial performance, supported by strategic focus on sustainability and efficiency.
Q2-2025 Updates
Positive Updates
Safety Improvements
A 55% reduction in high-potential recordable injuries and leading peers in TRIFR, showing progress towards an accident-free environment.
Iron Ore Production Increase
Iron ore production reached 84 million tons, a 4% increase year-on-year, marking the highest second quarter output since 2018.
Nickel Production Growth
Nickel production rose by 44% year-on-year, driven by productivity initiatives and the successful ramp-up of the Voisey's Bay underground mine.
Copper Production Surge
Copper production increased by 18% year-on-year, achieving the best second quarter since 2019.
Cost Reduction Achievements
Fourth consecutive quarter of year-on-year reduction in C1 cash cost, down to $22.2 per ton, marking an 11% decrease year-on-year.
Improved Financial Performance
Pro forma EBITDA reached $3.4 billion, a 7% increase quarter-on-quarter, with a $1 billion recurring free cash flow in Q2.
Sustainability Leadership
Vale published its first sustainability-related financial information report, leading the industry in transparency and sustainable mining initiatives.
Negative Updates
Decline in Iron Ore Reference Prices
Iron ore reference prices declined by 13%, impacting the year-on-year EBITDA, which decreased by 14%.
Pellet Premium Decline
Pellet premiums have declined due to reduced demand from increased Chinese steel exports to other regions, affecting productivity requirements.
Uncertain Regulatory Environment
The delay in the caves decree from the government, which could impact future mining operations if not resolved.
Company Guidance
During Vale's Second Quarter 2025 Earnings Call, several key metrics and strategic guidance points were highlighted. The company reported a pro forma EBITDA of $3.4 billion, reflecting a 7% improvement quarter-on-quarter but a 14% decline year-on-year due to a 13% drop in iron ore reference prices. Vale's iron ore production reached 84 million tons, a 4% increase year-on-year, marking the highest second-quarter output since 2018. Nickel production surged 44% year-on-year, significantly boosted by initiatives at Voisey's Bay, while copper production rose 18%, marking the best second quarter since 2019. The company is optimistic about reducing its 2025 all-in cost guidance for copper to $1,500-$2,000 per ton, potentially enhancing EBITDA by $300 million. Vale's focus remains on operational excellence, cost reduction, and safety, with a reported 55% reduction in high-potential recordable injuries. Additionally, the company announced a $1.4 billion dividend distribution, aligning with its commitment to shareholder returns.

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 in the market. The balance sheet is strong with manageable debt levels and a solid equity base, though the decline in ROE warrants attention. Cash flow performance, particularly the significant decline in free cash flow, needs improvement to ensure long-term financial health.
Income Statement
75
Positive
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
70
Positive
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
65
Positive
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.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue37.20B37.54B41.78B43.84B54.50B40.02B
Gross Profit13.17B13.60B17.70B19.81B32.77B20.98B
EBITDA13.49B12.94B15.56B23.74B32.23B19.95B
Net Income5.82B6.10B7.98B18.79B22.45B4.88B
Balance Sheet
Total Assets83.43B80.25B94.19B86.89B89.44B92.01B
Cash, Cash Equivalents and Short-Term Investments4.00B5.01B3.66B4.80B11.90B14.26B
Total Debt18.55B17.74B16.80B15.44B17.20B20.11B
Total Liabilities47.07B45.69B53.20B49.54B54.14B57.19B
Stockholders Equity35.21B33.43B39.46B35.87B34.47B35.74B
Cash Flow
Free Cash Flow1.15B2.92B7.25B6.04B20.65B10.10B
Operating Cash Flow7.46B9.37B13.16B11.48B25.68B14.32B
Investing Cash Flow-5.22B-5.37B-6.32B-4.69B-6.61B-4.67B
Financing Cash Flow-1.78B-2.27B-7.34B-13.91B-20.28B-2.68B

Vale SA Technical Analysis

Technical Analysis Sentiment
Positive
Last Price9.71
Price Trends
50DMA
9.57
Positive
100DMA
9.38
Positive
200DMA
9.18
Positive
Market Momentum
MACD
0.08
Positive
RSI
49.51
Neutral
STOCH
9.07
Positive
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 9.71 is below the 20-day moving average (MA) of 9.75, above the 50-day MA of 9.57, and above the 200-day MA of 9.18, indicating a neutral trend. The MACD of 0.08 indicates Positive momentum. The RSI at 49.51 is Neutral, neither overbought nor oversold. The STOCH value of 9.07 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for VALE.

Vale SA Risk Analysis

Vale SA disclosed 38 risk factors in its most recent earnings report. Vale SA reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks

Vale SA Peers Comparison

Overall Rating
UnderperformOutperform
Sector (44)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
76
Outperform
$138.14B12.0919.51%4.59%-7.68%14.56%
75
Outperform
$102.28B9.5018.18%6.15%0.03%-3.78%
74
Outperform
$41.29B8.1513.49%8.26%-12.89%-46.86%
73
Outperform
$2.34B147.411.79%0.48%5.55%-79.38%
63
Neutral
$12.79B-9.57%39.42%-172.40%
48
Neutral
$638.35M-9.63%2.04%8.66%66.06%
44
Neutral
AU$1.54B-7.54-18.84%4.39%-2.92%-37.74%
* Basic Materials Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
VALE
Vale SA
9.71
0.06
0.62%
BHP
BHP Group
53.70
2.54
4.96%
MTRN
Materion
112.38
0.78
0.70%
RIO
Rio Tinto
60.59
2.17
3.71%
NEXA
Nexa Resources SA
4.89
-1.62
-24.88%
MP
MP Materials
69.29
56.98
462.88%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Aug 05, 2025