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Has Market Sentiment Changed for Vale Recently?

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Market sentiment

As we saw in the previous part of this series, Vale (VALE) has a consensus recommendation of “hold” based on ratings from 31 analysts covering the stock, according to Bloomberg.

Investors may also want to know what the recent market sentiment is toward the stock. If more upgrades than downgrades are happening for the stock, it could mean that a positive sentiment is emerging. On the other hand, more downgrades could point to a deteriorating market sentiment.

This could give an insight into the latest sentiments regarding stocks such as Vale, BHP Billiton (BHP), and Rio Tinto (RIO).

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Analyst upgrades and downgrades

After Vale released its 1Q16 production report on April 20, 2016, many analysts commented on the stock. Morgan Stanley reaffirmed its “underweight” rating on Vale at a target price of $2.9.

Credit Suisse reaffirmed its “sell” rating on the stock on April 20. It currently has a target price of $4 for Vale. BB&T, on the other hand, increased its 1Q16 estimates for Vale. Credit Agricole downgraded Vale from an “underperform” to a “sell” rating on April 14.

UBS has a “neutral” recommendation on the stock, with a target price of $3.4. After Vale’s 4Q15 results, the broker said, “I can understand Vale’s strategy because if iron ore slips to $35 per tonne, all of a sudden you have an issue. But the question is what valuations can they get for these assets?”

Peers’ recommendations

Macquarie reiterated its “hold” rating on Cliffs Natural Resources (CLF) on April 19, 2016, ahead of its 1Q16 earnings. It has a target price of $3 on the stock. Cliffs forms 3.5% of the SPDR Metals and Mining ETF (XME).

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