Vale (NYSE:VALE) Shares Gap Up - Here's What Happened

Key Points

• Vale shares jumped at the open, rising from a prior close of $13.76 to $14.72 before trading at approximately $14.32 on heavy volume.
• Analysts remain broadly cautious, with a consensus “Hold” rating and an average price target of $16.04; recent targets range from $16.00 to $17.00, while some firms lowered their forecasts.
• Vale’s latest quarterly results missed expectations, reporting $0.36 in EPS versus $0.46 expected and revenue of $10.24 billion versus $10.47 billion forecast. The company also paid a special dividend of $0.3088 per share.

Vale S.A. (NYSE:VALE - Get Free Report)'s stock price gapped up before the market opened on Monday. The stock had previously closed at $13.76, but opened at $14.72. Vale shares last traded at $14.3160, with a volume of 20,808,644 shares.

Analysts Set New Price Targets

A number of research firms recently issued reports on VALE. Bank of America reissued a "neutral" rating and set a $16.00 target price (down from $18.00) on shares of Vale in a research report on Wednesday, August 5th. Barclays lifted their price target on shares of Vale from $16.75 to $17.00 and gave the company an "equal weight" rating in a research report on Monday, August 3rd. Royal Bank Of Canada boosted their price objective on shares of Vale from $15.00 to $16.00 and gave the stock a "sector perform" rating in a research note on Wednesday, September 16th. Morgan Stanley reissued an "equal weight" rating and issued a $16.50 price objective (down from $19.50) on shares of Vale in a research report on Wednesday, July 8th. Finally, Weiss Ratings restated a "hold (c)" rating on shares of Vale in a report on Wednesday, July 8th. One analyst has rated the stock with a Strong Buy rating, two have assigned a Buy rating, twelve have assigned a Hold rating and one has assigned a Sell rating to the company. According to MarketBeat.com, Vale presently has a consensus rating of "Hold" and an average price target of $16.04.

Vale Stock Performance

The stock has a 50-day simple moving average of $14.54 and a 200-day simple moving average of $15.35. The company has a market capitalization of $63.53 billion, a price-to-earnings ratio of 28.72 and a beta of 0.42. The company has a current ratio of 1.19, a quick ratio of 0.77 and a debt-to-equity ratio of 0.45.

Vale (NYSE:VALE - Get Free Report) last released its earnings results on Thursday, July 30th. The basic materials company reported $0.36 EPS for the quarter, missing the consensus estimate of $0.46 by ($0.10). The business had revenue of $10.24 billion for the quarter, compared to analysts' expectations of $10.47 billion. Vale had a net margin of 5.11% and a return on equity of 19.87%. On average, analysts anticipate that Vale S.A. will post 1.86 earnings per share for the current year.

Vale Dividend Announcement

The company also recently declared a special dividend, which was paid on Thursday, September 10th. Investors of record on Thursday, August 13th were given a dividend of $0.3088 per share. The ex-dividend date of this dividend was Thursday, August 13th. Vale's dividend payout ratio is currently 89.80%.

Hedge Funds Weigh In On Vale

Several large investors have recently added to or reduced their stakes in VALE. QRG Capital Management Inc. lifted its stake in Vale by 12.1% in the second quarter. QRG Capital Management Inc. now owns 106,359 shares of the basic materials company's stock valued at $1,600,000 after buying an additional 11,446 shares during the last quarter. Envestnet Asset Management Inc. boosted its holdings in shares of Vale by 8.5% during the second quarter. Envestnet Asset Management Inc. now owns 5,248,034 shares of the basic materials company's stock valued at $78,930,000 after acquiring an additional 410,464 shares during the period. Tidal Investments LLC grew its position in shares of Vale by 15.1% during the second quarter. Tidal Investments LLC now owns 423,725 shares of the basic materials company's stock worth $6,373,000 after acquiring an additional 55,569 shares during the last quarter. Integrated Wealth Concepts LLC grew its position in shares of Vale by 7.9% during the second quarter. Integrated Wealth Concepts LLC now owns 83,074 shares of the basic materials company's stock worth $1,249,000 after acquiring an additional 6,090 shares during the last quarter. Finally, RFG Advisory LLC acquired a new stake in shares of Vale in the 2nd quarter worth about $178,000. 21.85% of the stock is currently owned by institutional investors.

Vale Company Profile

Vale SA is a Brazil-based global mining company and one of the world's major producers of iron ore and iron ore pellets, which are used primarily in steelmaking. The company also produces nickel, copper, manganese, coal and other mineral products, serving customers in the steel, energy and technology industries.

Founded in 1942 as Companhia Vale do Rio Doce, the company was privatized in 1997 and adopted the Vale name in 2007. Its operations are concentrated in Brazil, particularly in the states of Pará and Minas Gerais, while its base-metals business has mining and processing activities in countries including Canada and Indonesia.

Vale also operates an integrated logistics system that includes railways, ports and maritime transportation infrastructure used to move its products from mining regions to domestic and international markets.

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