Bernstein cuts Vale's earnings outlook as rising costs seen

|About: Vale S.A. (VALE)|By:, SA News Editor

Bernstein analyst Paul Gait lowers his FY 2014 earnings outlook for Vale (VALE +0.7%) to $2.15/share, down from his prior estimate of $2.55, after Q2 earnings missed expectations.

Although revenue should grow in H2 on higher production and possible stronger iron ore prices, costs should increase too, Bernstein says while maintaining its thesis that supports Vale’s high-quality assets and its growing presence in base metals.

The firm expresses some concern that Vale's ambitions to regain the market share it has lost in the iron ore market over the past decade "could translate into a relaxation in the company’s capital discipline."