VALE
Vale S.A.
Cyclical Commodities
Price today
$14.71
what the market pays
Worth
$12.88
calculated cycle value
Price is 14% above its value
charlieapp.co
Price vs Intrinsic Value
The line is the price month by month; the green band marks when it's undervalued (−20% off value). When the price drops in there, the discount is real, not opinion.
How many times the cash flow
Cyclical Commodities · vs 6 peers
You pay 18.6x times this business's cash flow; its sector median is 23.3x.
10% above what Charlie thinks it's worth (16.7x) — you're overpaying, sector or no sector.
Why Fair price?
The model estimates an intrinsic value of $12.88 per share. Today's price of $14.71 is just 12% off that value — not cheap, not expensive, that's a fair price.
This is a quality business. The price reflects that quality.
There's no extra safety margin. Not the best time to buy new.
To enter with a margin, the price should drop to $10.30–$12.24.
At what price would buying make sense?
Entry zones
🟢 Undervalued
≤$10.30
-20% off Value
🟡 Discounted
≤$12.24
-5% off Value
⚪ Today
$14.71
-12% Valor
Fair price
Good business at a fair price. If you already own it, holding makes sense. For a new position, wait for a better price.
“It's far better to buy a wonderful company at a fair price than a fair company at a wonderful price.”
— Warren Buffett
Model updated · July 2026
The business
Vale won the geological lottery: it mines iron cheaper than anyone.
Vale mines and sells iron ore to the world's steelmakers, mostly China. It charges per ton at the iron spot price, with premium pellets and a growing base metals business (nickel and copper) for batteries.
Low-cost Brazilian mines and high-grade iron — it sits in the first quartile of the global cost curve. That's not a brand moat; it's geology. When the iron price falls, Vale survives while the marginal players die.
Revenue history
From $40.0B to $37.5B in 4 years. Sales are shrinking — the engine is losing steam.
Where each $100 of sales goes
Revenue $38.4B · FY2025
Of every $100 in sales, $95 goes to costs and operations; $5 is left as net profit (5% margin).
Catalysts and risks
Iron production at an all-time record of 336Mt, with guidance to keep scaling.
Base Metals EBITDA doubled — copper and nickel are starting to really matter.
Dividend yield ~7% sustained as long as iron holds above $90/t.
Chinese steel demand: if real estate keeps deflating, the iron price goes with it.
Brumadinho provisions still have $4.3B contingent — the dead don't expire.
Capex of $5.5B pressures reported FCF; the dividend depends on the cycle cooperating.
Charlie's note
“Paying 13.85x for first-quartile geology is reasonable: the moat is the cost curve, not the brand, and with 4% growth and a 37% gross margin you're paying to survive when iron falls and the marginal players die. Patience here means waiting on the cycle, not the quality.”
Analysis · May 2026
So when would be a good price for Vale S.A.?
By our calculation, not yet. We will email you the day it drops to $12.24 — so you do not have to keep checking.
🔔 Email meFree · no card
Charlie informs, it doesn't advise. No information should be taken as a recommendation to buy or sell.