Iron Ore Majors Are Getting Cheaper in a Record-Breaking Rally
(Bloomberg) -- Iron ore’s surge to record highs is fueling dizzying gains among producers. But on an earnings basis, heavyweights like Vale SA and BHP Group just keep getting cheaper.
Rio de Janeiro-based Vale, the world’s second-largest shipper of the steelmaking ingredient, has surged about 90% in six months. Yet, the stock is fetching less than five times estimated earnings, down from more than six at the start of the year. It’s a similar story for BHP: It’s up about 40% but its valuation has slipped back.
Slightly lower valuations may indicate shares still have upside. Vale, for example, is expected to generate a third of its market value in earnings this year. Either that or investors are waiting to see if the boom is going to last.
©2021 Bloomberg L.P.