Deutsche downgrades Value to Hold with catalysts played out

Deutsche Bank analyst Liam Fitzpatrick downgraded Vale to Hold from Buy with a price target of $17, down from $18. The analyst cites the recent rally in the shares and “higher longer” base metal costs for the downgrade. The firm continues to see medium-term value in Vale but says several near-term catalysts, like the iron ore price recovery, Energy Transition Metals stake sale and linked capital return, have played out. Cash payments in relation to Brumadinho and Samarco will “crimp” the company’s cash flows in the years ahead, the Energy Transition Metals turnaround could still take several years to deliver and a higher provision in relation to Samarco could be announced in the months ahead, the analyst tells investors in a research note.