Vale SA (VALE) AI Stock Analysis

• Market Cap: $40.27B
• Dividend Yield: 7.82%
• Average Volume (3M): 38.11M
• Price to Earnings (P/E): 6.6
• Beta (1Y): 0.80
• Revenue Growth: -8.71%
• EPS Growth: -22.75%
• Country: US
• Employees: 64,616
• Sector: Basic Materials
• Sector Strength: 58
• Industry: Industrial Materials
• EPS (TTM): 1.42
• Shares Outstanding: 4,539,008,000
• 10 Day Avg. Volume: 44,338,364
• 30 Day Avg. Volume: 38,114,168
• PEG Ratio: 1.48
• Price to Book (P/B): N/A
• Price to Sales (P/S): 1.03
• Price to Cash Flow (P/CF): N/A
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $11.68
• Price Target Upside: 19.79% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 7

Vale SA's overall stock score reflects a challenging year with declines in key financial metrics but is buoyed by strong operational performance and attractive valuation. The earnings call provided positive guidance, highlighting record production and cost efficiency, which are significant strengths. Valuation metrics, such as the low P/E ratio and high dividend yield, enhance the stock's attractiveness despite mixed technical indicators.

Positive Factors

Earnings Performance

Vale reported Proforma EBITDA that was 3.6% above internal estimates, driven by better realized pricing and higher shipments of copper and nickel.

Shareholder Returns

Vale announced a new 18-month buyback program of 120mn shares, which is 3% of its outstanding shares.

Valuation

Vale is seen as attractively valued, trading at 4.2x EV/EBITDA and generating an 8.5% yield in 2025.

Negative Factors

Operational Issues

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

Production Challenges

Iron ore production was 5.2% below Visible Alpha consensus and dropped 4.5% year over year due to lower volumes and pellet production.

Sales and Consensus

Iron ore sales, including pellets and ROM, of 81.2Mt were just 0.9% shy of the model and below consensus of 84.8Mt.

Vale SA Business Overview & Revenue Model

Company Description

Vale SA is a Brazilian multinational corporation engaged in metals and mining operations, primarily focusing on the production of iron ore and nickel. As one of the largest mining companies in the world, Vale's operations span across various continents, including South America, North America, Asia, and Africa. The company also engages in logistics, energy, and steelmaking ventures, further diversifying its portfolio beyond mining. Vale is committed to sustainable development and innovation in its operations, ensuring a balance between economic growth and environmental stewardship.

How the Company Makes Money

Vale SA generates revenue primarily through the extraction, production, and sale of iron ore, which is a critical raw material in steel manufacturing. Iron ore sales account for the majority of Vale's income, driven by global demand from the construction and manufacturing sectors. Additionally, Vale produces and sells nickel, a key component in stainless steel and lithium-ion batteries, thus tapping into the growing market for renewable energy and electric vehicles. The company also earns from its logistics services, which include railways, ports, and shipping operations, enhancing its ability to efficiently transport raw materials. Strategic partnerships with other mining and steelmaking companies further bolster Vale's market presence and financial performance.

Vale SA Financial Statement Overview

Summary

Vale SA faced a challenging fiscal year with declines in revenue, profitability, and cash flow. While maintaining a stable balance sheet with a solid equity base, reduced profitability and cash flow highlight pressures in the mining sector.

Income Statement

Vale SA's income statement shows a challenging year-over-year decline in several key metrics. Revenue decreased by 20.3% from 2023 to 2024. Gross Profit Margin was 36.3%, and Net Profit Margin was 15.3% in 2024, down from 42.4% and 19.1% in 2023 respectively. The EBIT and EBITDA margins also declined, indicating reduced operational efficiency. Despite these challenges, the company remains profitable, although at a lower margin compared to previous years.

Balance Sheet

Vale SA's balance sheet reflects a moderately leveraged position with a Debt-to-Equity ratio of 0.53 in 2024. The Equity Ratio stood at 41.7%, indicating a stable equity base. Return on Equity was 15.3%, reflecting a decline in profitability. The company's equity base remains robust, though total assets have decreased, reflecting the current industry challenges.

Cash Flow

The cash flow statement shows a significant decrease in Free Cash Flow, dropping by 66.8% from 2023 to 2024. The Operating Cash Flow to Net Income Ratio was 1.59, indicating strong cash generation relative to net income. However, the Free Cash Flow to Net Income Ratio was 0.48, reflecting reduced cash available for reinvestment and dividends. This highlights potential cash flow challenges amidst declining revenues.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
37.54B	41.78B	43.84B	54.50B	40.02B
	Gross Profit
13.60B	17.70B	19.81B	32.77B	20.98B
	EBIT
10.99B	14.21B	17.21B	27.69B	16.72B
	EBITDA
12.94B	15.56B	23.74B	32.23B	19.95B
	Net Income Common Stockholders
6.10B	7.98B	18.79B	22.45B	4.88B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
5.01B	3.66B	4.80B	11.90B	14.26B
	Total Assets
80.25B	94.19B	86.89B	89.44B	92.01B
	Total Debt
17.74B	16.80B	15.44B	17.20B	20.11B
	Net Debt
12.78B	13.19B	10.70B	5.48B	6.62B
	Total Liabilities
45.69B	53.20B	49.54B	54.14B	57.19B
	Stockholders Equity
33.43B	39.46B	35.87B	34.47B	35.74B
Cash Flow		Free Cash Flow
2.44B	7.36B	6.04B	20.65B	9.89B
	Operating Cash Flow
8.12B	13.40B	11.48B	25.68B	14.32B
	Investing Cash Flow
-4.98B	-6.49B	-4.69B	-6.61B	-4.67B
	Financing Cash Flow
-1.85B	-7.41B	-13.91B	-20.28B	-2.68B

Vale SA Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 9.75
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

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 9.75 is above the 20-day moving average (MA) of 9.38, above the 50-day MA of 9.50, and above the 200-day MA of 9.64, indicating a bullish trend. The MACD of -0.05 indicates Negative momentum. The RSI at 57.32 is Neutral, neither overbought nor oversold. The STOCH value of 88.90 is Negative, 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
RIO	74 Outperform	$97.72B	8.01	20.93%	6.64%	-0.81%	14.59%
VALE	72 Outperform	$40.27B	6.63	16.72%	7.82%	-8.71%	-22.75%
BHP	71 Outperform	$117.69B	10.64	26.13%	5.06%	-3.15%	54.08%
MTRN	65 Neutral	$1.66B	284.19	0.67%	0.67%	1.19%	-93.81%
MP	62 Neutral	$3.73B	―	-5.41%	―	-19.57%	-392.96%
NEXA	57 Neutral	$798.60M	―	-20.22%	―	6.28%	29.57%
Sector *	49 Neutral	$1.96B	-1.42	-21.96%	3.81%	0.71%	-27.38%