Vale Has 'Unique' Setup: Goldman Sachs Declares Stock 'Too Attractive To Ignore'

Shares of Vale SA VALE were climbing during Tuesday's trading session.

Vale’s story is now “too attractive to ignore” and investors are likely to increase exposure to this stock as the confidence around the iron-ore supply-demand balance builds in 2024, according to Goldman Sachs.

The Vale Analyst: Marcio Farid upgraded the rating for Vale from Neutral to Buy, while raising the price target from $12.20 to $19.50.

The Vale Thesis: Despite the stock’s recent outperformance, “we believe the current rally has legs,” Farid said in the upgrade note.

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The analyst stated that the company currently has a “unique” setup due to a combination of five tailwinds “that has not been in place since at least 2014.” This includes:

• A balanced iron ore market with prices expected to reach $110 per tonne in 2024,
• Positive operational momentum,
• Relatively low investor exposure,
• Attractive valuation
• Expectations of “ongoing China policy support (with iron ore being the most China-centric commodity)”

“Vale is now our preferred name within LatAm Materials,” Farid further wrote.

VALE Price Action: Shares of Vale had risen by 1.25% to $15.84 at the time of publication Tuesday.

Now Read: What's Going On With Palantir Stock Tuesday?

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