10 Best Materials Stocks to Buy Right Now

2) Vale S.A. (NYSE:VALE)

Average Upside Potential: 47.5%

Vale S.A. (NYSE:VALE) is engaged in producing and selling iron ore, iron ore pellets, nickel, and copper in Brazil and internationally.

Vale S.A. (NYSE:VALE) continues to implement a Value-Based Management (VBM) approach in a bid to optimize its operations and enhance shareholder value. The VBM vision demonstrates potential benefits to production and unit costs extending into 2028 and beyond. Wall Street analysts believe that such improvements should increase Vale S.A. (NYSE:VALE)’s net present value. The company’s strategic vision for 2030 focuses on a performance-driven culture, premium product portfolio, and stakeholder trust. Precisely, the company’s long-term growth should stem from cost optimization.

Vale S.A. (NYSE:VALE)’s management remains optimistic about its cost efficiency, targeting to reach sub-$20 cash costs by 2026, and it remains confident in the long-term potential of the nickel sector. It also plans to increase iron ore capacity to 350 million tons and further enhance copper production. Industry experts believe that Vale S.A. (NYSE:VALE) remains well-positioned to capitalize on any improvements in iron ore prices or higher global demand.

This means that elevated production volumes should result in economies of scale, potentially reducing per-unit costs and improving overall profitability. During increased demand or supply constraints from other producers, Vale S.A. (NYSE:VALE) can potentially capture a larger market share and benefit from price premiums.

In Q3 2024, the company’s operational and sales performance saw an improvement throughout the business segments. Notably, the iron ore shipments rose by 1.3 Mt (or 2%) YoY, courtesy of an 18% increase in pellet sales because of higher production and strong demand.

As per Wall Street analysts, the shares of Vale S.A. (NYSE:VALE) have an average price target of $15.39.