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VALE S.A. (VALE) Gains But Lags Market: What You Should Know

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In the latest trading session, VALE S.A. (VALE - Free Report) closed at $12.77, marking a +1.75% move from the previous day. The stock lagged the S&P 500's daily gain of 1.97%. Meanwhile, the Dow gained 1.88%, and the Nasdaq, a tech-heavy index, added 0.24%.

Prior to today's trading, shares of the company had lost 0.63% over the past month. This has was narrower than the Basic Materials sector's loss of 13.23% and the S&P 500's loss of 9.93% in that time.

Investors will be hoping for strength from VALE S.A. as it approaches its next earnings release. On that day, VALE S.A. is projected to report earnings of $0.65 per share, which would represent a year-over-year decline of 43.97%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $10.52 billion, down 17.04% from the year-ago period.

VALE's full-year Zacks Consensus Estimates are calling for earnings of $2.93 per share and revenue of $43.57 billion. These results would represent year-over-year changes of -45.74% and -20.94%, respectively.

It is also important to note the recent changes to analyst estimates for VALE S.A.These recent revisions tend to reflect the evolving nature of short-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. The Zacks Consensus EPS estimate has moved 8.66% lower within the past month. VALE S.A. is holding a Zacks Rank of #3 (Hold) right now.

Valuation is also important, so investors should note that VALE S.A. has a Forward P/E ratio of 4.28 right now. Its industry sports an average Forward P/E of 5.76, so we one might conclude that VALE S.A. is trading at a discount comparatively.

We can also see that VALE currently has a PEG ratio of 1.15. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Mining - Iron was holding an average PEG ratio of 1.15 at yesterday's closing price.

The Mining - Iron industry is part of the Basic Materials sector. This industry currently has a Zacks Industry Rank of 95, which puts it in the top 38% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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