Vale has a "cocktail of positive catalysts" that will boost the stock in 2023 and beyond, according to Morgan Stanley. Analyst Carlos De Alba upgraded Vale to overweight from equal weight and upped his price target to $20, which implies upside of 21.7% from Thursday's close. The Brazil-based mining company is mainly focused on iron ore and nickel. "Our move is based on iron ore price momentum into 1H23, supported by reduced supply, China exiting its COVID-zero policy, and positive property market policies in the country," he said in a note to clients. "In addition, we see catalysts for a re-rating." The stock will be helped by rising prices for iron ore, which Morgan Stanley is bullish on during the first half of 2023. Iron ore trades at about $109 per ton, which is up from $80 in early November, but could rise to $140 in the second quarter of 2023 as Chinese steel output improves while iron ore supply seasonally falls. Part of the company's goal is to increase the value the stock market gives its metal business through showing how operations have improved with volume expanded and selling a minority stake to help finance further expansion. De Alba said the company partnering with an electric vehicle or battery maker could help achieve those goals through upping the perceived value of its nickel and copper business. Reopening measures in China should also help the stock as it's tied directly to iron ore production abilities. A full re-opening is expected by Morgan Stanley in spring 2023, though there will likely be some remaining restrictions as rollout takes place. The stock could also be helped by a final deal to settle the 2015 Mariana dam accident with Brazil's potential new government, De Alba said. The dam had collapsed in 2015, killing 19. De Alba said the company should cap special dividends as net debt would likely reach the upper on of the $10 billion to $20 billion target following the deal. But he said dividends can still be expected because free cash flow should be strong. To be sure, the stock could not perform as well as anticipated if the Chinese economic reopening does not match expectations or if the market for iron ore does not tighten in the first half of 2023. It could also be hurt if the turnaround of the metals business with the minority stake sell-off isn't successful. — CNBC's Michael Bloom contributed to this report.