THE OK (VALE3) is again the most recommended action among banks and brokers for the month. The number of recommendations the mining company is taking in July easily surpasses the second place on the list.
Of the 29 recommended portfolios released this month, Vale was mentioned in 22 different portfolios, while Petrobras (PETR4), the second most cited name, received 13 nominations.
For the BTG Pactual (BPAC11), Vale is one of the biggest beneficiaries of the reopening and recovery of the Chinese economy in the coming months. The Asian country suffered a lot because of the lockdowns aggressive, and now BTG thinks there is a tipping point.
In the short term, the bank sees the prices of iron ore supported by high levels of production of steel.
BTG once again highlights two points that make Vale’s thesis attractive: the low valuation and the strong dividends/stock buyback programs.
“Management remains highly disciplined in its capital allocation (very little capex growth [investimentos]), implying that a good part of the agenda must depend on the return to shareholders – we estimate a yield (yield) of 15% for 2022, including the approximately $8 billion share buyback program recently announced,” he says.
THE Agora Investments thinks the recent equities drop was “overly negative” as iron ore prices remained resilient in the first half of the year, reflecting lower supply, shrinking inventories and strong steel production in China.
The broker is optimistic about a recovery in steel demand in the third quarter and expects to see better profitability for steel mills.
“We estimate iron ore prices at an average of US$140/tonne in 2022 (against US$130 previously), correcting to US$110 in 2023 as supply increases,” he says.
According to Ágora, above-average iron ore prices should continue to support Vale’s robust cash generation (estimated at US$16 billion and US$12 billion in 2022 and 2023, respectively). The brokerage works with an estimated remuneration of more than 20%, between dividends and share buybacks.
Commodities lead the ranking
Stocks with exposure to commodities lead the ranking of the biggest indications of the month. In addition to Vale and Petrobras, the suzano (SUZB3) and the PetroRio (PRIOR3) had several mentions in the portfolios, with the first receiving 13 recommendations and the second being cited 12 times.
Soon after, there is a tie between three roles, each with 10 nominations: Itaú Unibanco (ITUB4), multiplan (MULT3) and WEG (WEGE3).
Check out the top 7:
survey
The lifting of Money Times was carried out based on information on recommended portfolios disclosed by 29 institutions. For July, 100 actions were indicated, totaling 309 recommendations.
Participated in the survey Ágora Investimentos, Ativa Investimentos, BB Investimentos, Benndorf, BTG Pactual, CM Capital, Nu invest, Eleven, Elite, Empiricus, Genial Investimentos, Guide Investimentos, Inter Research, Inv, Itaú BBA, Mirae Asset, MyCap, Modalmais, Nova Futura, ÓramaPlannerRB InvestimentosBanco SafraSantanderTerra InvestimentosToroWarrenPagBank and Vitreous.
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Source: Moneytimes
I am an author at Global happenings and I mostly cover automobile news. In my time working in the automotive industry, I have developed a keen interest in the latest developments and trends. My writing skills have also allowed me to share my knowledge with others through articles and blog posts.
