Vale (NYSE:VALE) Shares Gap Down After Earnings Miss

Key Points

• Shares gapped down after Vale reported an EPS of $0.44 vs. the $0.46 consensus and revenue of $9.26B vs. $9.33B, with the stock opening at $16.28 after a $16.91 close and last trading around $16.05.
• Wall Street reactions are mixed but generally positive: several firms raised price targets (JPMorgan to $18.50, Morgan Stanley to $19.50, BofA to $19.00), and the consensus rating is a “Moderate Buy” with a $16.02 price target.
• Notable insider purchases occurred (two insiders bought shares at about $16.11 each), while institutional investors hold roughly 21.85% of the stock.

Vale S.A. (NYSE:VALE - Get Free Report)'s share price gapped down prior to trading on Wednesday following a weaker than expected earnings announcement. The stock had previously closed at $16.91, but opened at $16.28. Vale shares last traded at $16.0450, with a volume of 13,458,137 shares trading hands.

The basic materials company reported $0.44 earnings per share (EPS) for the quarter, missing the consensus estimate of $0.46 by ($0.02). Vale had a return on equity of 20.16% and a net margin of 6.12%.The firm had revenue of $9.26 billion during the quarter, compared to analysts' expectations of $9.33 billion.

Wall Street Analyst Weigh In

VALE has been the topic of several recent analyst reports. JPMorgan Chase & Co. upped their target price on Vale from $18.00 to $18.50 and gave the company an "overweight" rating in a research report on Friday, April 10th. UBS Group boosted their price target on Vale from $12.00 to $16.00 and gave the stock a "neutral" rating in a research note on Friday, March 27th. Morgan Stanley upped their price objective on shares of Vale from $18.00 to $19.50 and gave the company an "overweight" rating in a report on Thursday, April 9th. Wall Street Zen cut shares of Vale from a "buy" rating to a "hold" rating in a research note on Saturday. Finally, Bank of America raised shares of Vale from a "neutral" rating to a "buy" rating and boosted their target price for the stock from $18.00 to $19.00 in a research report on Thursday, April 2nd. One equities research analyst has rated the stock with a Strong Buy rating, eight have assigned a Buy rating and six have assigned a Hold rating to the stock. According to MarketBeat, the company has an average rating of "Moderate Buy" and a consensus price target of $16.02.

Insider Transactions at Vale

In other news, insider Parenti Grazielle Tallia acquired 10,464 shares of the business's stock in a transaction dated Wednesday, April 1st. The shares were acquired at an average cost of $16.11 per share, with a total value of $168,575.04. Following the completion of the acquisition, the insider owned 10,464 shares of the company's stock, valued at approximately $168,575.04. This trade represents a ∞ increase in their ownership of the stock. The acquisition was disclosed in a document filed with the SEC, which is accessible through this link. Also, VP Sobrinho Sami Arap acquired 12,990 shares of Vale stock in a transaction dated Wednesday, April 1st. The stock was purchased at an average price of $16.11 per share, with a total value of $209,268.90. Following the completion of the purchase, the vice president owned 12,990 shares of the company's stock, valued at approximately $209,268.90. The trade was a ∞ increase in their ownership of the stock. The disclosure for this purchase is available in the SEC filing.

Institutional Trading of Vale

Several institutional investors and hedge funds have recently bought and sold shares of VALE. N.E.W. Advisory Services LLC acquired a new stake in shares of Vale in the fourth quarter worth $26,000. Investors Towarzystwo Funduszy Inwestycyjnych Spolka Akcyjna lifted its position in Vale by 128.3% during the fourth quarter. Investors Towarzystwo Funduszy Inwestycyjnych Spolka Akcyjna now owns 2,055 shares of the basic materials company's stock valued at $27,000 after purchasing an additional 1,155 shares during the period. Cary Street Partners Investment Advisory LLC boosted its holdings in Vale by 60.0% in the third quarter. Cary Street Partners Investment Advisory LLC now owns 2,748 shares of the basic materials company's stock valued at $30,000 after purchasing an additional 1,030 shares during the last quarter. Bruce G. Allen Investments LLC purchased a new stake in Vale in the fourth quarter valued at $33,000. Finally, Triumph Capital Management acquired a new stake in Vale during the 3rd quarter worth about $34,000. 21.85% of the stock is currently owned by institutional investors and hedge funds.

Vale Price Performance

The firm has a 50-day simple moving average of $16.19 and a two-hundred day simple moving average of $14.45. The company has a market capitalization of $73.42 billion, a price-to-earnings ratio of 28.82 and a beta of 0.53. The company has a current ratio of 1.15, a quick ratio of 0.78 and a debt-to-equity ratio of 0.53.

Vale Company Profile

Vale SA is a Brazilian multinational mining company and one of the world's largest producers of iron ore and iron ore pellets. In addition to iron ore, the company produces and sells a range of bulk commodities and metals, including nickel, copper, coal, manganese, ferroalloys and cobalt, and it participates in the fertilizer inputs market. Vale also operates extensive logistics assets — including rail, port and maritime logistics — that support its mining and export activities and provide services to third parties in some regions.

Headquartered in Brazil, Vale maintains a global operational footprint with mining, processing and shipping activities across the Americas, Africa, Asia and Oceania.

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