Why We’re Revising Our Price Estimate For Vale From $3 To $4
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:
Have more questions about Vale? See the links below.
- Vale’s Full Year 2015 Pre-Earnings Report
- Vale’s Q4 2015 Earnings Report: Decline In Iron Ore Prices Negatively Impacts Results
- How Important Is China To Vale’s Iron Ore Sales?
- What Is China’s Share Of Vale’s Overall Revenue?
Notes: