VALE LT Vale S.A. Sponsored ADRBATS:VALEW_SliwinskiVALE Vale Basics: Vale excels in extracting, processing, and selling iron ore (including fines and pellets) to global customers, especially steelmakers. Iron ore is the key raw material for steel production, so demand is heavily tied to global infrastructure, construction, and manufacturing (with China being the biggest buyer). Vale is essentially a massive iron ore giant that uses its scale, low-cost Brazilian mines, and integrated logistics to generate huge cash flows Fundamentals: Revenue: Showed strong growth from 2020 ($39.55B) to 2021 ($54.50B, +37.8% YoY), driven by surging iron ore prices amid global demand recovery post-COVID and supply constraints. However, it trended downward afterward, dropping 30% from 2021 to 2024, due to normalizing commodity prices, weaker Chinese steel demand (Vale's top market), and increased global supply. Average annual growth over 5 years: ~ -0.8% (volatile, not steady decline). Net Income: Highly cyclical, peaking at $22.45B in 2021 (+360% YoY from 2020) thanks to high margins on iron ore sales. It halved by 2023 and further declined in 2024, impacted by lower prices, higher costs (e.g., energy, logistics), and non-operating items like impairments on nickel/coal assets and Brumadinho dam settlement costs (ongoing since 2019 disaster). 2020 was suppressed by pandemic effects and prior impairments. 5-year CAGR: ~4.8%, but with sharp volatility. Basic EPS: Mirrored net income trends, adjusted for share count (Vale has repurchased shares, reducing dilution—e.g., basic shares dropped from ~5.1B in 2020 to ~4.3B in 2024). Peak at $4.47 in 2021, then down to $1.44 in 2024 (-68% from peak). This reflects profitability swings but also benefits from buybacks boosting per-share metrics. Free Cash Flow (FCF): Generated robustly in 2021 ($20.65B) on high operating cash flows minus capex, enabling dividends and debt reduction. Declined in subsequent years due to lower EBITDA and sustained capex (~$5-6B annually for mine expansions and sustainability). 2020 FCF was solid at $10.1B despite COVID, aided by cost controls. Over 5 years, FCF averaged ~$9.4B, supporting Vale's high dividend yield (often >10%), but it's sensitive to capex cycles and working capital. Predictions for 2026: Iron Prices are up about 15% since lows, again testing the bottom of 2021 Metals as a whole are predicted to increase in price in 2026, this should drive the earnings of mining companies like VALE All miners are reporting increased in revenue due to the increase in prices Chart: 1)Breakout from a downtrend starting from May 2021 to October 2025 2) Increased Volume on monthly chart showing buyers 3) Making higher highs and higher lows on daily = uptrend Original Entry= $12 after breakout Target = 22 previous support