Latest news with #VALE
Forbes
29-05-2025
- Business
- Forbes
Why Is U. S. Steel Stock Surging?
United States Steel (NYSE:X) has experienced a stock increase of over 50% so far this year, in contrast to the 1% decline in the S&P 500 Index. The rise in U.S. Steel's stock price is significantly more pronounced compared to its competitors, including VALE (NYSE: VALE), which has increased by 8% year to date, Cleveland-Cliffs (NYSE:CLF), which has decreased by 32% over the same timeframe, ArcelorMittal (NYSE:MT), which is up 33% year to date, and Nucor Corp (NYSE: NUE), which has decreased by 5% during the same period. The rise in U.S. Steel's stock follows President Donald Trump's backing of a strategic collaboration between U.S. Steel and Japan's Nippon Steel. The suggested $14.9 billion takeover, which was initially obstructed by the Biden administration due to concerns regarding national security, is now being reframed as a 'planned partnership.' With this arrangement, U.S. Steel will keep its headquarters in Pittsburgh, and the U.S. government will continue to hold authority over the company. Nippon Steel intends to invest up to $4 billion in establishing a new steel mill, with the overall agreement projected to generate 70,000 jobs and contribute $14 billion to the U.S. economy within 14 months. For investors seeking potential gains with reduced volatility, the High Quality portfolio has significantly outperformed the S&P 500, delivering over 91% returns since its inception. Part of the increase observed over the last five months can be attributed to the approximate 2.5% growth in U.S. Steel's revenues, rising from $3.64 billion in Q4 2024 to $3.73 billion in the first quarter of 2025. Nonetheless, the company continued to report losses, with earnings per share worsening to -$0.52 in the most recent quarter, compared to -$0.39 in the final quarter of 2024. Refer to Buy or Fear X. While U.S. Steel has experienced negative revenue growth in recent years, its P/S multiple has increased. The company's P/S multiple climbed from 0.4 in 2020 to 0.5 in 2024. Currently, the P/S is at 0.6, yet there isa potential downside when comparing the current P/S to levels seen in previous years: 0.3 at the close of 2021 and 0.3 at the end of 2022. U.S. Steel's recent financial results indicate persistent challenges within the steel industry, characterized by declining earnings and revenue. Revenue reached $3.73 billion in the first quarter of 2025, representing a 10.4% decrease year-over-year. Adjusted EBITDA was reported at $172 million, down from $190 million in Q4 2024. The Adjusted EBITDA in the Flat-Rolled segment tallied at $104 million, a decline of 33% year-over-year due to lower average realized prices and increased energy costs. The company expects adjusted EBITDA for Q2 2025 to fall between $375 million and $425 million, anticipating improvements in the North American Flat-Rolled and Mini Mill segments as seasonal logistics limitations ease and steel prices increase. President Donald Trump's support for Nippon's acquisition of U.S. Steel has been positively received by investors, as it not only alleviates previous uncertainties but also positions U.S. Steel to become part of the third-largest steel producer globally by volume. The surge in the stock reflects optimism regarding the company's prospects under this new partnership. For further details, refer to our analysis on U.S. Steel's Valuation: Is X Stock Expensive Or Cheap?. Regulatory risk forms only a minor component of the risk assessment framework we utilize in assembling the Trefis High Quality (HQ) Portfolio which, equipped with a collection of 30 stocks, has demonstrated a track record of significantly outperforming the S&P 500 over the last four years. Why is this the case? As a whole, HQ Portfolio stocks offered superior returns with reduced risk compared to the benchmark index; resulting in less volatility as seen in HQ Portfolio performance metrics.
Forbes
20-05-2025
- Business
- Forbes
What's Next With VALE Stock?
Vale (NYSE:VALE) stock has not performed particularly well this year, increasing by approximately 10% year to date. In comparison, competitor ArcelorMittal (NYSE:MT) experienced a 36% rise, and United States Steel stock (NYSE:X) saw an increase of 26% during the same timeframe. So what is going on with VALE, and what trends might influence the company's future performance? Vale recently announced its Q1 2025 earnings, reflecting the effects of decreasing iron ore prices despite operational efficiencies. Revenue was reported at $8.12 billion, a 4% decline year-over-year, marginally below the consensus estimate of $8.39 billion. Net Income stood at $1.39 billion, down 17% from $1.67 billion in Q1 2024. Free Cash Flow amounted to $504 million, significantly down from $2.2 billion in Q1 2024. Iron Ore production decreased by 4.5% to 67.7 million metric tons due to heavy rainfall in Brazil. However, sales volumes increased by 3.6% to 66.1 million tons, helped by inventory drawdowns. The average realized iron ore price was $90.80 per ton, nearly a 10% reduction compared to the previous year. Copper production rose by 11% to roughly 90,900 tons, while nickel production also increased by 11% to about 43,900 tons. Despite the challenges posed by declining commodity prices and adverse weather events, Vale's emphasis on cost efficiency and strategic project development positions it well to navigate the current market landscape. The company's focus on operational optimization and diversification is expected to bolster its performance in the upcoming quarters. See Buy or Sell VALE. For those investors seeking potential gains with reduced volatility, the High Quality portfolio has significantly outperformed the S&P 500, yielding over 91% returns since its inception. In April 2025, the U.S. government reinstated a 25% tariff on steel imports. These actions have disrupted global trade patterns, particularly within the steel sector, which is closely related to iron ore demand. Vale's CEO, Gustavo Pimenta, indicated that the company has not yet observed substantial effects from these tariffs, primarily because Vale does not export significant amounts of iron ore to the U.S. However, he acknowledged that a possible global economic slowdown stemming from escalating trade tensions could indirectly influence commodity markets, including iron ore. Vale has acquired the remaining 50% interest in the Baovale iron ore project from its Chinese partner Baosteel, achieving full control of the Agua Limpa mine in Minas Gerais, Brazil. The company also entered into agreements with Eneva and Origem Energia to purchase natural gas under free market conditions, supporting its goal of sourcing 90% of its natural gas from the free market by 2025. The company intends to reduce cash costs by 15% in 2025 compared to 2024 figures. This strategy involves optimizing logistics, reducing waste, and utilizing automation to sustain profitability amidst increasing trade barriers. Vale has increased shipments to Europe by 18% in Q1 2025, taking advantage of the European Union's carbon border adjustments that favor low-emission suppliers. The company is now prioritizing high-grade iron ore (65% Fe content), which currently accounts for 45% of traded volumes, up from 30% in 2023. This shift is aligned with mills seeking efficiency in order to reduce energy costs. See how has VALE valuation changed over time. Vale's current Price-to-Earnings (P/E) ratio is at 6.6x, significantly lower than the 9.3x levels in 2020, indicating a possible undervaluation. In contrast, peers like ArcelorMittal currently have a P/E ratio of 17.4x, while United States Steel's P/E stands at 22x. Vale's current stock price appears to be substantially beneath various intrinsic value estimates, suggesting it may indeed be a worthwhile value investment. Nevertheless, the volatility of the commodity market should be taken into account. While VALE represents a solid stock, if you prefer even less volatility while preserving upside potential, consider the High Quality portfolio, which has outperformed the S&P 500 and achieved returns exceeding 91% since inception.
Business Insider
12-05-2025
- Business
- Business Insider
Vale initiated with an Outperform at CICC
CICC initiated coverage of Vale (VALE) with an Outperform rating and $11.30 price target Protect Your Portfolio Against Market Uncertainty Discover companies with rock-solid fundamentals in TipRanks' Smart Value Newsletter. Receive undervalued stocks, resilient to market uncertainty, delivered straight to your inbox. Published first on TheFly – the ultimate source for real-time, market-moving breaking financial news. Try Now>>
