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

Shares of Vale SA (NYSE: 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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