Barclays Maintains an 'Overweight' on Vale S.A. (VALE); Strategy Intact
Tweet
Share
E-mailGet Alerts VALE Hot Sheet
Price: $14.22 -3.07%
Rating Summary:
13 Buy, 13 Hold, 2 Sell
Rating Trend:
Down
Today's Overall Ratings:
Up: 15 | Down: 18 | New: 23
Rating Summary:
13 Buy, 13 Hold, 2 Sell
Rating Trend:
Down
Today's Overall Ratings:
Up: 15 | Down: 18 | New: 23
Join SI Premium – FREE
Barclays maintains an 'Overweight' on Vale S.A. (NYSE: VALE), PT $46.
Barclays analyst says, "Feedback from the Barclays Capital International Franchise Conference hosted in Napa Valley. Investors remain highly concerned about lingering macro risks (Chinese slowdown, European sovereign risks, end of QE2), opex/capex inflation and resource nationalism. The main source of concern, in our view, is the extent of the anticipated demand slowdown ahead, with some pricing in hard-landing scenarios. In contrast, Vale delivered a reassuring message to investors, stating that it is sold out in iron ore and committed to its organic growth pipeline/ returning cash to shareholders."
"We recommend that investors build positions in Vale. We expect: (i) only a modest demand slowdown from China in 2H11; (ii) iron ore prices to remain very high for at least 3 years; (iii) above cost of capital returns in most of its projects; and (iv) capital discipline and strategic focus to remain intact. Vale trades at a 2011 EV/EBITDA of 4.4x (in line with Rio Tinto/28% discount to BHP), and we reiterate our PT of US$46/shr (considering 2015 iron ore volumes of 436Mtpa vs. Vale's new guidance of 469Mtpa)."
For more ratings news on Vale S.A. click here and for the rating history of Vale S.A. click here.
Shares of Vale S.A. closed at $31.33 yesterday.
Barclays analyst says, "Feedback from the Barclays Capital International Franchise Conference hosted in Napa Valley. Investors remain highly concerned about lingering macro risks (Chinese slowdown, European sovereign risks, end of QE2), opex/capex inflation and resource nationalism. The main source of concern, in our view, is the extent of the anticipated demand slowdown ahead, with some pricing in hard-landing scenarios. In contrast, Vale delivered a reassuring message to investors, stating that it is sold out in iron ore and committed to its organic growth pipeline/ returning cash to shareholders."
"We recommend that investors build positions in Vale. We expect: (i) only a modest demand slowdown from China in 2H11; (ii) iron ore prices to remain very high for at least 3 years; (iii) above cost of capital returns in most of its projects; and (iv) capital discipline and strategic focus to remain intact. Vale trades at a 2011 EV/EBITDA of 4.4x (in line with Rio Tinto/28% discount to BHP), and we reiterate our PT of US$46/shr (considering 2015 iron ore volumes of 436Mtpa vs. Vale's new guidance of 469Mtpa)."
For more ratings news on Vale S.A. click here and for the rating history of Vale S.A. click here.
Shares of Vale S.A. closed at $31.33 yesterday.
Serious News for Serious Traders! Try StreetInsider.com Premium Free!
You May Also Be Interested In
- Abbott Labs (ABT) PT Raised to $134 at BTIG
- Pentair (PNR) PT Lowered to $64 at BNP Paribas Exane, 'The first cut isn't the deepest'
- ConAgra (CAG) PT Raised to $14 at UBS Post Q4 Results on Attractive Valuations
Create E-mail Alert Related Categories
Analyst CommentsRelated Entities
Barclays, The Capital Group CompaniesSign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!
