Vale could see nickel, until now the "ugly duckling" of its operation, become a value catalyst in 2026, helping to increase the company's projected EBITDA by 8% that year and causing the company to be seen more than just an iron ore producer.
This assessment comes from BTG Pactual , given the appreciation that the commodity has been registering in a short period of time – in one month, the price of nickel rose 25% in the international market, reaching US$ 18,000 per ton.
“Although Vale is one of the largest global nickel producers (behind Norilsk), nickel has been seen by investors as a problem for Vale for years,” says an excerpt from the report, signed by analysts Leonardo Correa and Marcelo Arazi. “For several quarters in recent years, Vale’s nickel unit has posted negative EBITDA and the business has been burning through cash sequentially.”
The rise in nickel prices is a result of regulatory uncertainties stemming from Indonesia, which is responsible for almost 50% of the commodity's supply in the global market.
Changes in licensing rules have been the main trigger for prices in the short term, with the market trying to estimate how much ore and processing capacity will be approved by the Indonesian government for 2026.
Initial reports indicate that the production target for 2026 was set at 250 million tons, down from 379 million tons recorded last year.
Furthermore, analysts at BTG Pactual state that delays in the licensing process and a lack of clarity regarding project approvals are creating doubts about the future availability of ore, keeping prices supported out of caution.
This scenario strengthens Vale's base metals unit, which should account for 15% to 20% of the company's EBITDA, with something around US$3 billion – for 2026, BTG Pactual analysts estimate an amount of US$17.4 billion, a 12.6% increase. BTG Pactual has a buy recommendation for the shares, with a target price of US$15 for the ADRs.
"With the recent increase in nickel and copper prices, this mark-to-market valuation would generate an upside potential of 8% in our consolidated EBITDA, which is quite significant (base metals EBITDA alone could easily exceed US$4 billion)," says an excerpt from the report.
Assuming nickel prices remain at current levels and that management continues to reap the benefits of the unit's restructuring, BTG Pactual analysts say the valuation of Vale's base metals unit should undergo a review, a positive effect for the company's shares.
They highlight that Vale's EV/EBITDA is around 4 times, while its peers trade at multiples between 7 and 10 times, due to the company being seen only as a player in the iron ore market.
"As we have stated previously, it makes little sense for Vale to trade as a purely iron ore company if it has an exposure to base metals of almost 20%, and that number is growing," says an excerpt from the report.
According to analysts, if the base metals unit manages to deliver US$4 billion in EBITDA in 2026, it could unlock almost 20% in equity value for Vale.
At around 11:28 AM, Vale's shares were up 0.14%, at R$ 75.98. In 12 months, the shares have accumulated a gain of 46.05%, bringing the market value to R$ 345 billion.
