Vale Rises Most in Month as BofA Says Buy on Cutbacks: Rio Mover
Vale SA (VALE3), the world’s largest iron- ore producer, rose the most in almost a month after Bank of America Corp. recommended investors buy the stock.
Vale, based in Rio de Janeiro, increased 3.8 percent to 38.70 reais at the close in Sao Paulo today, the biggest gain since Jan. 2. The stock was the fourth-best performer among 49 stocks on the Bloomberg Industries Metals, Mining and Steel Aggregate index.
Investors buying Vale shares may profit from an estimated 22 percent return in the next 12 months, Bank of America analysts led by Felipe Hirai wrote in a note to clients after upgrading the stock to buy from neutral. The company stands to profit from cost cuts, more capital discipline and asset sales, they said.
“The risk reward balance is turning to Vale’s favor,” the Sao Paulo-based analysts wrote today. “The probability of the worst case scenario is very unlikely.”
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