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    Why is Vale’s share (VALE3) in 17 of 28 portfolios for August, even after weak results?

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    Even though the numbers for the second quarter were lower than expected, Vale still has good cash generation and maintains a strong distribution of dividends, evaluates PagBank (Image: REUTERS/Pilar Olivares)

    The poor results of OK (VALE3) did not shake analysts’ confidence in the shares. In August, the mining company follows as the main recommendation.

    The name is present in 17 of 28 portfolios, easily surpassing the second most indicated role for the month.

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    according to PagBankeven though the numbers for the second quarter were lower than expected, Vale still has good cash generation and maintains a strong distribution of dividends.

    On the same day the results were released, Vale announced the payment of R$ 3.57 per share in dividends for the first half of 2022. The cut-off date is August 11, and payment will be made on September 1 .

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    In the evaluation of Agora Investmentsthe recent fall in Vale shares seems “overly negative”, as the prices of the iron ore remained resilient in the first half of the year.

    In addition, adds the broker, a recovery in demand for steel in the third quarter and the expectation of better profitability for steelmakers should support the commodity.

    “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,” Ágora says.

    The broker believes that high iron ore prices should continue to support cash generation of US$16 billion and US$12 billion in 2022 and 2023, respectively, leading to strong shareholder remuneration of more than 20%, between dividends. and share buybacks.

    O Santander is also confident about iron ore levels in the medium term, as the supply chain still has “persistent challenges”.

    Analysts at the bank expect to see prices above $100 a tonne in 2023, taking into account:

    • the improvement in Chinese demand to from the second quarter of 2022; and
    • the weak growth of supply in the coming years.

    “While we recognize that the bearish revision of the guidance of iron ore production made by Vale can maintain your discount from valuation for global pairs, we continue to see an attractive entry point for our high iron ore thesis by longer”, says Santander.

    Oil companies on the radar

    Other stocks with exposure to commodities are among analysts’ favorites for August. Petrobras (PETR4) and PetroRio (PRIOR3) make up the top 5 for the month, each receiving 11 nominations.

    But it’s the bank Itau (ITUB4) which is at the front, cited in 13 different portfolios.

    Closing the list of the five most recommended roles, the clothing retailer Renner stores (LREN3) appeared in 10 portfolios. Analysts are gradually returning to attractiveness in assets with greater exposure to the domestic market.

    survey

    The lifting of Money Times was carried out based on information from recommended portfolios disclosed by 28 institutions. For August, 97 actions were indicated, totaling 283 recommendations.

    Participated in the survey Ágora Investimentos, Ativa Investimentos, BB Investimentos, Benndorf, BTG Pactual, CM Capital, Eleven, Elite, Empiricus, Genial Investimentos, Guide Investimentos, Inter, Inv, Itaú BBA, Mirae Asset, MyCap, Modalmais, Nova Futura, Órama, Planner, RB Investimentos, Banco Safra, Santander, Terra Investimentos, Toro, Warren, PagBank and Vitreo.

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    Disclaimer

    O Money Times publishes informative articles of a journalistic nature. This publication does not constitute an investment recommendation.

    Source: Moneytimes

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