Why We’re Revising Our Price Estimate For Vale From $3 To $4

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We are raising our price estimate for Vale by 31%, which is primarily driven by a mini-recovery in iron ore prices and a reduction in capital spending by the company. Vale recently revised downwards its capital budget for 2016 as it looks to preserve cash flows in a business environment which is still characterized by subdued iron ore prices. Our rationale for the price revision is illustrated by the tables shown below:

Vale Change in Price Estimate

Have more questions about Vale? See the links below.

Relevant Articles
  1. Forecast Of The Day: Vale’s Average Realized Iron Ore Price Per Ton
  2. Is Vale Stock A Buy As Iron Ore Prices Rise?
  3. What’s Happening With Vale Stock?
  4. Trading At A Mere 4x Earnings, Is VALE Stock A Buy?
  5. Why Did VALE Stock Decline Sharply In Recent Weeks?
  6. Company Of The Day: Vale

Notes:

1) The purpose of these analyses is to help readers focus on a few important things. We hope such lean communication sparks thinking, and encourages readers to comment and ask questions on the comment section, or email content@trefis.com
2) Figures mentioned are approximate values to help our readers remember the key concepts more intuitively. For precise figures, please refer to our complete analysis for Vale