Do Barclays, JP Morgan, And Credit Suisse Agree On Vale’s Stock Price Estimate?

by Trefis Team
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Vale stock (NYSE: VALE) has seen some volatility this year, driven by declining iron ore volume due to production cuts following a major dam accident at one of its sites in Brazil.  Overall, brokerage firms still remain bullish on the stock, with an average price estimate of close to $16.90 per share, mainly due to premium pricing of its high-grade pellet output. In this analysis, we look at how the top brokerage firms view Vale stock, and how their price targets have changed over time.

View the Trefis interactive dashboard analysis – Vale Price Target: Are JP Morgan, Barclays, and Credit Suisse bullish on Vale in 2019? In addition, here is more Materials data.

1) Top Banks are mixed in their views: JPMorgan and Credit Suisse are ~50-60% ahead of the market, while Barclays is about 24% ahead of the market

  • JPMorgan is most bullish on Vale with a $18.50 price target, followed by Credit Suisse with a price target of $18.
  • Barclays is estimating an upside of about 24% on the stock, with a target of $14.20 per share.
  • This implies an average price target of $16.90, ahead of Vale’s current market price.

2) Price Target Movement in 2019

  • Since January 2019, all 3 banks have decreased and then subsequently raised their price targets for Vale.
  • However, Barclays has not altered its target price since April 2019, which has led to a lower average target price today compared to the beginning of the year

3) Multi-year Consensus Movement

  • The multi-year view shows banks moving largely in-sync, and so is the consensus target.
  • All three major banks have continuously increased their price target for Vale from 2016 to 2018 before slashing it in 2019.
  • Consequently, the consensus target price also went up from $9.30/share in 2016 to $18.30/share in 2018, before decreasing to $16.90  per share in July 2019.

  • Top 3 banks’ consensus target at the start of year [SoY] correctly predicted the direction of end of year [EoY] stock price for 2017, but missed for 2018 and 2019.

4) Link between Target Price, Revenue, and Profitability

  • While the top 3 banks’ consensus prediction wasn’t always accurate, Vale’s reported Revenues and Profits did move in the same direction as the banks’ price targets.
  • Vale Revenue base increased from $34 billion in 2017 to $36.6 billion in 2018, and is expected to further expand to $39.5 billion in 2019.
  • Similarly, after increasing from $1.05/share in 2017 to $1.32/share in 2018, the EPS is expected to further increase sharply to $2.15/share in 2019.
  • The average target price for Vale has followed the same trend, which is evident with it increasing from $9.30 per share in 2017 to $18.30 per share at the beginning of 2019.

5) Vale’s Fundamental Multiples Vis-à-vis S&P 500 Index

  • FY 2019 is likely to see a sharp rise in Vale’s EPS due to its deleveraging program and stable foreign currency, along with a rise in pellet pricing.
  • However, the P/E ratio is expected to face some pressure as the market seems to still be unsure of the extent of repercussions of the Brazil dam accident in January 2019.


  • The top banks may not have accurately predicted Vale’s stock price over recent years, though they were largely correct in terms of direction in 2017. The stock price saw some sharp movements in 2018 and 2019 due to macro-economic headwinds and unexpected operational issues.
  • Overall, with top banks becoming more bullish on Vale since the release of its Q1 2019 earnings, this might bode well for Vale stock and its fundamentals.


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