Vale (BOVESPA:VALE3) - Share price, News & Analysis

Q: What is the Fair Price of VALE3 when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

VALE3 (R$69.8) is trading below our estimate of [[fair value]] (R$109.12)

VALE3 fundamental analysis
Snowflake Score
Valuation	4/6
Future Growth	1/6
Past Performance	4/6
Financial Health	5/6
Dividends	5/6

VALE3 Stock Overview

Vale S.A., together with its subsidiaries, produces and sells iron ore and iron ore pellets for use as raw materials in steelmaking in Brazil and internationally.

Rewards

Trading at 36% below our estimate of its fair value

Risk Analysis

Earnings are forecast to decline by an average of 21.5% per year for the next 3 years

Unstable dividend track record

Vale Competitors

Gerdau

BOVESPA:GGBR4

R$40.8b

Companhia Siderúrgica Nacional

BOVESPA:CSNA3

R$21.5b

CSN Mineração

BOVESPA:CMIN3

R$21.3b

Metalurgica Gerdau

BOVESPA:GOAU4

R$11.3b

Price History & Performance

Summary of all time highs, changes and price drops for Vale
Historical stock prices
Current Share Price	R$69.80
52 Week High	R$109.90
52 Week Low	R$61.85
Beta	0.76
1 Month Change	-4.12%
3 Month Change	-10.29%
1 Year Change	-35.55%
3 Year Change	59.76%
5 Year Change	121.24%
Change since IPO	131,523.61%

Recent News & Updates

Aug 04

Vale's (BVMF:VALE3) Conservative Accounting Might Explain Soft Earnings

Soft earnings didn't appear to concern Vale S.A.'s ( BVMF:VALE3 ) shareholders over the last week. We did some digging...

Shareholder Returns

	VALE3	BR Metals and Mining	BR Market
7D	2.6%	7.5%	3.3%
1Y	-35.5%	-37.0%	-18.9%

Return vs Industry: VALE3 exceeded the BR Metals and Mining industry which returned -37% over the past year.

Return vs Market: VALE3 underperformed the BR Market which returned -18.9% over the past year.

Price Volatility

Is VALE3's price volatile compared to industry and market?
VALE3 volatility
VALE3 Average Weekly Movement	5.0%
Metals and Mining Industry Average Movement	6.2%
Market Average Movement	6.0%
10% most volatile stocks in BR Market	9.7%
10% least volatile stocks in BR Market	2.3%

Stable Share Price: VALE3 is not significantly more volatile than the rest of BR stocks over the past 3 months, typically moving +/- 5% a week.

Volatility Over Time: VALE3's weekly volatility (5%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
1942	74,316	Eduardo de Salles Bartolomeo	https://www.vale.com

Vale S.A., together with its subsidiaries, produces and sells iron ore and iron ore pellets for use as raw materials in steelmaking in Brazil and internationally. The company operates through Ferrous Minerals and Base Metals segments. The Ferrous Minerals segment produces and extracts iron ore and pellets, manganese, ferroalloys, and other ferrous products; and provides related logistic services.

Vale Fundamentals Summary

How do Vale's earnings and revenue compare to its market cap?
VALE3 fundamental statistics
Market Cap	R$320.47b
Earnings (TTM)	R$101.49b
Revenue (TTM)	R$249.43b

3.2x

P/E Ratio

1.3x

P/S Ratio

Is VALE3 overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
VALE3 income statement (TTM)
Revenue	R$249.43b
Cost of Revenue	R$118.47b
Gross Profit	R$130.96b
Other Expenses	R$29.47b
Earnings	R$101.49b

Last Reported Earnings

Jun 30, 2022

Next Earnings Date

Oct 27, 2022

Earnings per share (EPS)	22.10
Gross Margin	52.50%
Net Profit Margin	40.69%
Debt/Equity Ratio	39.6%

How did VALE3 perform over the long term?

See historical performance and comparison

Dividends

10.4%

Current Dividend Yield

35%

Payout Ratio

Does VALE3 pay a reliable dividends?

See VALE3 dividend history and benchmarks

When do you need to buy VALE3 by to receive an upcoming dividend?
Vale dividend dates
Ex Dividend Date	Aug 12 2022
Dividend Pay Date	Sep 01 2022
Days until Ex dividend	1 day
Days until Dividend pay date	19 days

Does VALE3 pay a reliable dividends?

See VALE3 dividend history and benchmarks

We’ve recently updated our valuation analysis.

Valuation

Is VALE3 undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

4/6

Valuation Score 4/6

Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
Analyst Forecast

Key Valuation Metric

Which metric is best to use when looking at relative valuation for VALE3?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for VALE3. This is calculated by dividing VALE3's market cap by their current preferred multiple.
What is VALE3's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	R$320.47b

VALE3 key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue	1.5x
Enterprise Value/EBITDA	2.7x
PEG Ratio	-0.1x

Price to Earnings Ratio vs Peers

How does VALE3's PE Ratio compare to its peers?

VALE3 PE Ratio vs Peers

The above table shows the PE ratio for VALE3 vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	3x
GGBR4 Gerdau	2.7x	-32.4%	R$40.8b
CSNA3 Companhia Siderúrgica Nacional	2.6x	-9.9%	R$21.5b
CMIN3 CSN Mineração	4.5x	0.8%	R$21.3b
GOAU4 Metalurgica Gerdau	2.2x	n/a	R$11.3b
VALE3 Vale	3.3x	-21.5%	R$332.8b

Price-To-Earnings vs Peers: VALE3 is expensive based on its Price-To-Earnings Ratio (3.2x) compared to the peer average (3x).

Price to Earnings Ratio vs Industry

How does VALE3's PE Ratio compare vs other companies in the South American Metals and Mining Industry?

Price-To-Earnings vs Industry: VALE3 is expensive based on its Price-To-Earnings Ratio (3.2x) compared to the BR Metals and Mining industry average (3.1x)

Price to Earnings Ratio vs Fair Ratio

What is VALE3's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

VALE3 PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	3.2x
Fair PE Ratio	6.2x

Price-To-Earnings vs Fair Ratio: VALE3 is good value based on its Price-To-Earnings Ratio (3.2x) compared to the estimated Fair Price-To-Earnings Ratio (6.2x).

Share Price vs Fair Value

What is the Fair Price of VALE3 when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: VALE3 (R$69.8) is trading below our estimate of fair value (R$109.12)

Significantly Below Fair Value: VALE3 is trading below fair value by more than 20%.

Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

Analyst Forecast: Target price is more than 20% higher than the current share price and analysts are within a statistically confident range of agreement.

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Future Growth

How is Vale forecast to perform in the next 1 to 3 years based on estimates from 17 analysts?

Future Growth Score

1/6

Future Growth Score 1/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

-21.5%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: VALE3's earnings are forecast to decline over the next 3 years (-21.5% per year).

Earnings vs Market: VALE3's earnings are forecast to decline over the next 3 years (-21.5% per year).

High Growth Earnings: VALE3's earnings are forecast to decline over the next 3 years.

Revenue vs Market: VALE3's revenue is expected to decline over the next 3 years (-4.1% per year).

High Growth Revenue: VALE3's revenue is forecast to decline over the next 3 years (-4.1% per year).

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: VALE3's Return on Equity is forecast to be high in 3 years time (23.2%)

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Past Performance

How has Vale performed over the past 5 years?

Past Performance Score

4/6

Past Performance Score 4/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

51.2%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: VALE3 has high quality earnings.

Growing Profit Margin: VALE3's current net profit margins (40.7%) are higher than last year (36.1%).

Past Earnings Growth Analysis

Earnings Trend: VALE3's earnings have grown significantly by 51.2% per year over the past 5 years.

Accelerating Growth: VALE3's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: VALE3 had negative earnings growth (-3.2%) over the past year, making it difficult to compare to the Metals and Mining industry average (73.6%).

Return on Equity

High ROE: VALE3's Return on Equity (53%) is considered outstanding.

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Financial Health

How is Vale's financial position?

Financial Health Score

5/6

Financial Health Score 5/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: VALE3's short term assets (R$83.9B) exceed its short term liabilities (R$63.5B).

Long Term Liabilities: VALE3's short term assets (R$83.9B) do not cover its long term liabilities (R$184.7B).

Debt to Equity History and Analysis

Debt Level: VALE3's net debt to equity ratio (19.7%) is considered satisfactory.

Reducing Debt: VALE3's debt to equity ratio has reduced from 71.2% to 39.6% over the past 5 years.

Debt Coverage: VALE3's debt is well covered by operating cash flow (116.3%).

Interest Coverage: VALE3's interest payments on its debt are well covered by EBIT (22.5x coverage).

Balance Sheet

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Dividend

What is Vale current dividend yield, its reliability and sustainability?

Dividend Score

5/6

Dividend Score 5/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Cash Flow Coverage

10.45%

Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: VALE3's dividend (10.45%) is higher than the bottom 25% of dividend payers in the BR market (1.57%).

High Dividend: VALE3's dividend (10.45%) is in the top 25% of dividend payers in the BR market (7.46%)

Stability and Growth of Payments

Stable Dividend: VALE3's dividend payments have been volatile in the past 10 years.

Growing Dividend: VALE3's dividend payments have increased over the past 10 years.

Earnings Payout to Shareholders

Earnings Coverage: With its reasonably low payout ratio (34.7%), VALE3's dividend payments are well covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: With its reasonable cash payout ratio (55.1%), VALE3's dividend payments are covered by cash flows.

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Management

How experienced are the management team and are they aligned to shareholders interests?

2.1yrs

Average management tenure

CEO

Eduardo de Salles Bartolomeo (58 yo)

3.42yrs

Tenure

Mr. Eduardo de Salles Bartolomeo serves as the President (Chief Executive Officer) at Vale S.A. since April 2019. He served as President Commissioner of PT Vale Indonesia Tbk since April 04, 2018 and had b...

Leadership Team

Experienced Management: VALE3's management team is considered experienced (2.1 years average tenure).

Board Members

Experienced Board: VALE3's board of directors are considered experienced (3.3 years average tenure).

Ownership

Who are the major shareholders and have insiders been buying or selling?

Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.

Data	Last Updated (UTC time)
Company Analysis	2022/08/12 00:00
End of Day Share Price	2022/08/12 00:00
Earnings	2022/06/30
Annual Earnings	2021/12/31