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Vale S.A. (NYSE: VALE): Overvalued Compared To Others?

Vale S.A. (NYSE:VALE) price on Friday, March 17, rose 1.28% above its previous day’s close as an upside momentum from buyers pushed the stock’s value to $15.79.

A look at the stock’s price movement, the close in the last trading session was $15.59, moving within a range at $15.635 and $15.85. The beta value (5-Year monthly) was 0.81 while the PE ratio in trailing twelve months stood at 4.40. Turning to its 52-week performance, $20.77 and $11.68 were the 52-week high and 52-week low respectively. Overall, VALE moved -7.39% over the past month.

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Vale S.A.’s market cap currently stands at around $72.80 billion. The company has a Forward Dividend ratio of 1.47, with its dividend yield at 9.30%. As such, investors might be keen on an upside in the stock’s price ahead of the scheduled earnings report. Analysts project the company’s earnings per share (EPS) to be $0.7, which has seen fiscal year 2023 EPS growth forecast to increase to $2.96 and about $2.7 for fiscal year 2024. Per the data, EPS growth is expected to be -26.90% for 2023 and -8.80% for the next financial year.

Analysts have a consensus estimate of $10.04 billion for the company’s revenue for the quarter, with a low and high estimate of $9.53 billion and $10.48 billion respectively. The average forecast suggests down to a -7.10% growth in sales growth compared to quarterly growth in the same period last fiscal year. Wall Street analysts have also projected the company’s year-on-year revenue for 2023 to grow to $43.12 billion, representing a -1.60% decline on that reported in the last financial year.

Revisions could be used as tool to get short term price movement insight, and for the company that in the past seven days was 2 upward and no downward review(s). Turning to the stock’s technical picture we see that short term indicators suggest on average that VALE is a Hold. On the other hand, the stock is on average a 50% Buy as suggested by medium term indicators while long term indicators are putting the stock in 50% Buy category.

25 analyst(s) have given their forecast ratings for the stock on a scale of 1.00-5.00 for a strong buy to strong sell recommendation. A total of 9 analyst(s) rate the stock as a Hold, 13 recommend VALE as a Buy and 2 give it an Overweight rating. Meanwhile, 0 analyst(s) rate the stock as Underweight and 1 say it is a Sell. As such, the average rating for the stock is Overweight which could provide an opportunity for investors keen on increasing their holdings of the company’s stock.

VALE’s current price about -4.56% and -8.57% off the 20-day and 50-day simple moving averages respectively. The Relative Strength Index (RSI, 14) currently prints 38.48, while 7-day volatility ratio is 2.47% and 2.43% in the 30-day chart. Further, Vale S.A. (VALE) has a beta value of 0.89, and an average true range (ATR) of 0.48. Analysts have given the company’s stock an average 52-week price target of $19.19, forecast between a low of $12.00 and high of $25.50. Looking at the price targets, the low is 24.0% off current price level while to achieve the yearly target high, price needs to move -61.49%. Nonetheless, investors will most likely welcome a -17.16% jump to $18.50 which is the analysts’ median price.

In the market, a comparison of Vale S.A. (VALE) and its peers suggest the former has performed considerably stronger. Data shows VALE’s intraday price has changed 1.28% in last session and -8.81% over the past year. Comparatively, Rio Tinto Group (RIO) has moved -0.09% on the day and only -11.07% in the past 12 months. Looking at another peer, we see that ArcelorMittal S.A. (MT) price has dipped -2.65% on the day. However, the stock is -17.45% off its price a year ago. If we look at the PE ratio, we find that Vale S.A.’s ratio stands at 4.40 compared to Rio Tinto Group’s 8.48 and ArcelorMittal S.A.’s 2.67. Elsewhere, the overall performance for the S&P 500 and Dow Jones Industrial shows that the indexes are down -1.10% and -1.19% respectively in the last trading.

If we refocus on Vale S.A. (NYSE:VALE), historical trading data shows that trading volumes averaged 27.38 million over the past 10 days and 22.26 million over the past 3 months. The company’s latest data on shares outstanding shows there are 4.53 billion shares.

The 38.50% of Vale S.A.’s shares are in the hands of company insiders while institutional holders own 21.40% of the company’s shares. Also important is the data on short interest which shows that short shares stood at 48.92 million on Feb 27, 2023, giving us a short ratio of 2.41. The data shows that as of Feb 27, 2023 short interest in Vale S.A. (VALE) stood at 1.06% of shares outstanding, with shares short falling to 55.15 million registered in Jan 30, 2023. Current price change has pushed the stock -6.95% YTD, which shows the potential for further growth is there. It is this reason that could see investor optimism for the VALE stock continues to rise going into the next quarter.

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