Vale (NYSE:VALE) +0.8% in Thursday’s trading despite receiving a downgrade to Hold from Buy with a $17 price target, trimmed from $18, at Deutsche Bank, reflecting higher longer base metal costs and a 20%-plus rebound in the stock from the September low.
While the bank continues to see medium-term value in Vale (VALE), several near-term catalysts including iron ore price recovery, the Energy Transition Metals stake sale and linked capital return have played out.
Vale’s (VALE) underlying iron ore business remains highly cash generative, but cash payments related to Brumadinho and Samarco dam disasters will crimp cash flows – and shareholder returns – in the years ahead, and a higher provision for Samarco could be announced in the months ahead, Deutsche Bank analysts said.
Vale (VALE) has scheduled its Investor Day for December 6, and the bank said it expects flat to small positive growth in iron ore production and a modest Y/Y increase in capital spending for 2024.