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In the latest trading session, VALE S.A. (VALE) closed at $15.31, marking a -1.86% move from the previous day. This move lagged the S&P 500's daily gain of 0.28%. Meanwhile, the Dow gained 0.29%, and the Nasdaq, a tech-heavy index, added 0.16%.
Prior to today's trading, shares of the company had gained 12.15% over the past month. This has outpaced the Basic Materials sector's gain of 1.28% and the S&P 500's loss of 5.39% in that time.
VALE S.A. will be looking to display strength as it nears its next earnings release. On that day, VALE S.A. is projected to report earnings of $0.74 per share, which would represent a year-over-year decline of 32.11%. Meanwhile, our latest consensus estimate is calling for revenue of $11.5 billion, down 22.13% from the prior-year quarter.
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 such, positive estimate revisions reflect analyst optimism about the company's business and profitability.
Research indicates that these estimate revisions are directly correlated with near-term share price momentum. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.
The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 0.36% lower within the past month. VALE S.A. is holding a Zacks Rank of #4 (Sell) right now.
In terms of valuation, VALE S.A. is currently trading at a Forward P/E ratio of 7.43. For comparison, its industry has an average Forward P/E of 9.47, which means VALE S.A. is trading at a discount to the group.
Also, we should mention that VALE has a PEG ratio of 0.71. 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 0.71 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 253, which puts it in the bottom 1% 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.
To follow VALE in the coming trading sessions, be sure to utilize Zacks.com.
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