UPDATE: Credit Suisse Reiterates Underperform, Lowers Price Target On Vale SA On Balance Sheet Pressure

In a report published Monday, Credit Suisse analyst Ivano Westin reiterated an Underperform rating on

, but lowered the price target from $7.50 to $7.00. In the report, Credit Suisse noted, "We (i) marked to market our 2015 and 2016 estimates based on current commodities forward curves (iron ore at USD 61/t and USD 58/t, respectively, nickel at USD 14,500/t and copper at USD 5,900/t), (ii) lower cost estimates based on lower oil prices and depreciated BRL (CSe BRLUSD rate of 2.9 YE 2015 and 3.1 YE 2016), and (iii) estimate a capex reduction in 2015 of USD 2bn from the USD 10bn guidance. Since lower commodity prices are ultimately the key catalysts for Vale's earnings, the net impact of those changes resulted in the following estimates for the 2015 and 2016 periods, respectively: negative FCF of USD 1.8bn and USD 2.4bn, EV/Ebitda of 9.0x and 8.8x, and net debt/Ebitda of 3.8x and 3.9x. We maintained our Underperform rating and reduced our TP to USD 7.0/ADR from USD 7.5/ADR." Vale SA closed on Friday at $7.42.