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Dahlman Rose Downgrades Vale S.A. (VALE) to Hold; Concerns Rising

January 26, 2012 7:21 AM EST
Get Alerts VALE Hot Sheet
Price: $12.19 +0.16%

Rating Summary:
    16 Buy, 9 Hold, 3 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 13 | Down: 11 | New: 11
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Dahlman Rose downgraded Vale S.A. (NYSE: VALE) from Buy to Hold.

Deutsche analyst says, "While we like the quality of the assets in Vale’s portfolio, we have become increasingly concerned with decisions and developments that have taken place since former CEO Roger Agnelli was officially replaced in May. Potential plans to become more involved in the Brazilian steel industry, in our opinion, lend validity to claims Agnelli was replaced, in part, due to disagreements with the Brazilian government. We do not believe that such moves, while potentially beneficial to the Brazilian economy and employment rate, are in the best interests of the company’s shareholders. Additionally, continued ore degradation at its Brazilian iron ore mines, persistent issues with its “Valemax” fleet of iron ore carriers, and delays and cost increases for large scale development projects (notably the 90 MM mtpa Serra Sul project, which has had its timeline pushed back two years to 2016 and its projected cost inflated nearly 20% to $8 Bn) have made us more cautious on the shares."

For an analyst ratings summary and ratings history on Vale S.A. click here. For more ratings news on Vale S.A. click here.

Shares of Vale S.A. closed at $25.04 yesterday.


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