VALE S.A.

VALE3
End-of-day quote. End-of-day quote  - 11/24
74.63BRL +4.69%

Vale S.A. : Buying pressure

Jordan Dufee
Senior Analyst

Strategy published on : 11/18/2020 | 08:37

long trade
Target price hit

Entry price : 66.97BRL
Target : 72BRL
Stop-loss : 61BRL
Potential : 7.51%

Market participant are once again showing interest in shares in Vale S.A.. The technical chart pattern now appears positive for the short term with new upside potential.
Investors have an opportunity to buy the stock and target the BRL 72.

Summary

● The company has strong fundamentals. More than 70% of listed companies have a lower mix of growth, profitability, debt and visibility criteria.


Strengths

● Margins returned by the company are among the highest on the stock exchange list. Its core activity clears big profits.

● Thanks to a sound financial situation, the firm has significant leeway for investment.

● Its low valuation, with P/E ratio at 42.93 and 29.96 for the ongoing fiscal year and 2021 respectively, makes the stock pretty attractive with regard to earnings multiples.

● Upward revisions of sales forecast reflect a renewed optimism among the analysts covering the stock.

● Over the last twelve months, the sales forecast has been frequently revised upwards.

● Analysts covering this company mostly recommend stock overweighting or purchase.

● The average target price set by analysts covering the stock is above current prices and offers a tremendous appreciation potential.

● The tendency within the weekly time frame is positive above the technical support level at 48.05 BRL


Weaknesses

● The share is close to its long-term resistance in weekly data. Therefore, the potential should be limited. However, a further bullish movement when crossing this resistance will be a positive signal.

● Technically, the stock approaches a strong medium-term resistance at BRL 67.82.

● According to forecast, a sluggish sales growth is expected for the next fiscal years.

● Sales estimates for the next fiscal years vary from one analyst to another. This clearly highlights a lack of visibility into the company's future activity.

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