Will Vale S.A. (VALE) Stock Be Helped By This Analyst Note?

Analysts at Macquarie cut their rating on shares of Vale S.A. (NYSE:VALE) from Outperform to Neutral in their opinion released on January 28. Jefferies analysts have downgraded their rating of VALE stock from Buy to Hold in a separate flash note to investors on January 28. Analysts at HSBC Securities downgraded the stock to a Hold call from its previous Buy stance, in a research note that dated back to January 28.

By watching the trading activity of corporate insiders, it will become easier to get a sense of Vale S.A. (NYSE:VALE)’s prospects.

Vale S.A. (VALE) is expected to jump by 41.04 percent over the next 12 months, according to price target estimates compiled by finviz. Meanwhile, they have set a $19 price as 12-month high target. This represents a whopping 56.9 percent increase from where shares are trading today. The 12-month median price target assigned by the analysts stands at $15, which represents a return potential of 23.86 percent when compared to the closing price of the stock of $12.11 on Tuesday, February 05. The lowest price target for the stock is $9 — slightly more than -25.68 percent from VALE’s current share price.

The shares are currently floating around the first support level of $11.97. Below this, the next support is placed in the zone of $11.84. Till the time, the VALE stock trades above this level, bulls have nothing to fear. On momentum oscillators front, ‘RSI’ has touched 39.27 on daily chart, which may remain a cause for comfort. If the price breaks below $11.84 level on closing basis, then we may see more profit booking and the stock may show further weakness. On the flipside, hitting the $12.21 mark may result into a pull-back move towards $12.31 level.

VALE shares dropped -0.04 points or -0.33 percent on Tuesday to $12.11 with a light trade volume of 29.661 million shares. After opening the session at $12.12, the shares went as high as $12.175 and as low as $11.94, the range within which the stock’s price traded throughout the day. The firm is left with a market cap of $69.9 billion and now has 5.77 billion shares outstanding. Vale S.A. (VALE) stock has lost -13.62 percent of market value in 21 trading days.

VALE stock has a trailing 3-year beta of 1.35, offering the possibility of a higher rate of return, but also posing more risk. The portion of a company’s profit allocated to each outstanding share of common stock was $0.8 a share in the trailing twelve months. The stock’s value has fallen -8.19 percent year to date (YTD) against a decline of -0.09 percent in 12 month’s time. The company’s shares still trade -24.92 percent away from its 1-year high of $16.13 and 9.3 percent up from 52-week low of $11.08. The average consensus rating on the company is 2.1, on a scale where 5 equates to a unanimous sell rating. In short, the mean analyst recommendations are calling this stock a sell.

Shares of Vale S.A. (VALE) are trading at a P/E ratio of 16.66 times earnings reported for the past 12 months. The industry VALE operates in has an average P/E of 10.53. Its P/E ratio went as low as 7.31X and as high as 146.71 over the 5-year span. Further, it is sporting a 2.08 on the Price-to-Sales ratio. Compare this with the industry average P/S of 0.55. 38.4 percent is the gross profit margin for Vale S.A. and operating margin sits at 31 percent. Along with this, the net profit margin is 10.8 percent.

VALE will be showing off its Q4 earnings on March 27. Analysts are forecasting revenue to climb 9.7 percent to $10.1B in the next fiscal quarter, while earnings are seen soaring by nearly 38.89 percent to $0.5 per share. History has shown that shares in Vale S.A. have gone up on 11 different earnings reaction days and are predicted to add 0.02 percent when the company reports upcoming earnings. In last reported earnings results, it earned $0.27 per share, worse than the $0.39, adjusted, expected by Thomson Reuters consensus estimate. Revenue was $9.54B, better than the $9.45B analysts expected. Earnings are estimated to increase by 14.8 percent this year, 25.11 percent next year and continue to increase by 14.69 percent annually for the next 5 years.