Vale (VALE3) is back: mining company leads analysts’ preference for May; check out your favorite shares in the recommended portfolio of 12 brokers

The tires were already worn out and the pit stop could not be postponed. The pilot is the Vale (VALUE3)who left the podium of ‘Action of the Month‘ in the previous race, but is back in contention for the podium in May.

After reducing the fear of political interference in the company’s command and ensuring that Eduardo Bartolomeo would remain in charge until the end of the season, or rather, 2024, Vale’s shares (VALE3) rose 4.04% in April.

But this is only part of the company’s fuel, which also took advantage of the recovery in iron ore prices in China.

With better prospects and confidence from the ‘fans’, Vale (VALE3) starts in pole position with four recommendations — being the most recommended action in the recommended portfolios of 12 analysts.

In the exclusive survey that the Your money does every month with brokers and analysis houses, the units of BTG Pactual (BPAC11) they come right behind the mining company, with three nominations.

And to complete the fight for the podium Itaú Unibanco (ITUB4) and Telefônica Brasil, owner of Vivo (VIVT3) appear with two recommendations each.

Check out the main bets from each broker’s analysts for May below:

Understanding the Action of the Month: every month, Seu Dinheiro consults the main brokers in the country to find out what their bets are for the period. Within the recommended portfolios, normally with up to 10 securities, analysts indicate their three favorites. With the ranking in hand, we selected those who received at least two nominations.

Vale (VALE3) back on the podium

In recent weeks, Vale (VALE3) has experienced busy days — whether with the results of the first quarter or with the expectation of Eduardo Bartolomeo’s successor as president of the mining company.

At the beginning of the month, the company reported results for the first three months of the year.

With the lower price of ore between January and March this year, Vale’s net profit reached US$ 1.687 billion, which represents a 10% drop compared to the same period of the previous year.

Net profit attributed to Vale shareholders totaled US$1.679 billion in the first quarter of 2024, which represents a reduction of 9% on an annual basis.

Despite the drop, the number was in line with market expectations.

BTG Pactual highlights, in a recent report, that the company is delivering operating results even with weaker iron ore prices and the deterioration of real estate markets in China.

In the bank’s assessment, the metrics of the valuation de Vale remain attractive, considering that the mining company is trading 4.2x Ebitda.

The view that the company’s shares are significantly discounted is also shared by Inter analysts.

Furthermore, last week, Vale announced the succession plan. A triple list of candidates for the CEO position will be presented in September and the chosen one for the mining company’s presidency will be announced in early December.

It is also important to highlight that having Vale shares (VALE3) in the portfolio is a form of dollarization of the portfolio, as the company is a producer of commodities whose prices are quoted in North American currency.

Finally, there is an important warning for investors: negotiations on the process related to Samarco dam collapse in Mariana (MG).

Last Friday (3), the Union and the State of Espírito Santo rejected Vale’s proposal for compensation for the damage caused by the R$127 billion dam collapse. The State of Minas Gerais did not want to sign the joint response.

BTG Pactual (BPCA11): the “star” of banks?

With three nominations, the units of BTG Pactual (BPAC11) won the ‘Action of the Month’ podium for the first time this year and overtook the “darling” of the banks — Itaú Unibanco (ITUB4), which this time took the medal of bronze with just three recommendations.

In analysts’ view, investment banking should be boosted by lower interest rates. “When analyzing BTG’s P&L, we can infer that all revenue lines will likely benefit from the lower interest rate,” states Santander.

In addition, there is the expectation of results for the first quarter.

Even though BTG shares are not a bargain, the bank has a strong earnings performance.

“Operational leverage must also be taken into consideration, as we foresee revenues growing above expenses — even with the resumption of operations in the capital markets, which will probably drive higher bonus expenses, write analysts Ricardo Peretti and Alice Corrêa, from Santander .

Finally, it is worth remembering that the Your money It is part of the same economic group as BTG Pactual.