THE OK (VALE3) should continue to generate cash, but that does not mean that the share price will rise, says Vitreo analyst Bruno Guimarães. “Vale will make money, but the screen price will change,” he said.
The mining company’s share fell 1.3% on Friday (29), at R$69.75, after the company reported a net profit of US$6.2 billion in the second quarter, down 17.7% compared to the same period of 2021 and lower than expected by the market.
The performance was partly a reflection of lower revenues, impacted by lower realized prices and lower volumes sold, in a period marked by fears of global recession.
The Vitreo analyst highlights precisely that Vale’s performance is linked to that of the global economy. “It is a very cyclical company, which depends a lot on the dollar and the price of iron ore”, he explains. “It affects the company’s cash flow.”
Guimarães recalls that the mining company has 70% exposure to the Chinese market. For him, it is very difficult to price Vale, among other things, because there is a difficulty in predicting the economic policies that the Chinese government can adopt.
He says it’s always good to invest in non-cyclical companies that are easy to price when it comes to looking for dividends.
“But you can’t ignore the fact that Vale’s dividend yield is extremely interesting,” he says. “[Isso] can compensate [o risco]”.
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