From Barchart: 2024-11-11 08:22:00

UBS analysts downgraded Vale S.A. from Buy to Neutral with a lowered price target of $11.50 due to challenges and uncertainties in the company’s future, despite recent improvements and resolutions. Concerns about medium-term iron ore market fundamentals and potential pressure on prices persist, with risks in global markets affecting Chinese steel exports.

Vale achieved significant milestones in 2024, with positive developments expected to continue in government relations, rail concessions, and cave regulation updates. However, UBS warns of potential limitations on Chinese steel exports without sufficient stimulus to support demand. The company’s future dividend payments are expected to be based on free cash flow and market conditions in 2025 and 2026.

UBS projects Vale’s 2025 free cash flow yield to be around 3% with an estimated dividend yield of 7% at an iron ore price of $100 per ton. Shareholders may only receive the base dividend, with additional free cash flow allocated to other disbursements. The company’s financial outlook remains uncertain amidst market challenges and global economic conditions.



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