Morgan Stanley downgraded Vale S.A. (VALE) from Overweight to Equalweight. The bank lowered its price target for the miner from $19.50 to $16.50. Analysts cited a growing surplus in seaborne iron ore supply driven by weakening global steel production, particularly in China.
The bank raised its 2026 iron ore C1 cash cost projection for Vale to $23 per ton. This estimate exceeds the company's internal guidance. Consequently, Morgan Stanley's EBITDA and earnings per share forecasts for the second quarter and full year 2026 sit below market consensus.
These adjustments follow the July 7 announcement of Chairman Daniel André Stieler’s resignation, effective July 6. Despite Morgan Stanley's move, the broader analyst consensus remains a Buy. Average price targets still indicate potential upside from current trading levels.