Will ArcelorMittal’s Top Line Gain Momentum In 2022?

MT: Arcelor Mittal logo
Arcelor Mittal

The shares of ArcelorMittal (NYSE: MT) continued to trend upward as commodity and energy prices surged during the latter half of 2021. ArcelorMittal is a leading integrated steel manufacturer in the world with a strong presence in Europe and America. In 2021, the company’s total crude steel and iron ore production were 69 Mt (million metric tonnes) and 51 Mt, respectively. The WHO is actively exploring the criteria to end the pandemic as many countries have lifted restriction measures to spur macroeconomic growth. While the ripple effects of the Russia-Ukraine war will affect global trade in the near term, ArcelorMittal’s top line is expected to benefit from the upward commodity price cycle. Trefis highlights the historical trends in ArcelorMittal’s revenues across key operating segments in an interactive dashboard analysis.

How did ArcelorMittal perform in 2021?

In 2021, ArcelorMittal reported a 44% (y-o-y) growth in total revenues assisted by rising iron ore prices coupled with pent-up demand in China, and supply chain hurdles due to the pandemic. Geographically, the share of total sales in the Americas, Europe, and Asia & Africa was 33%, 55%, and 12%, respectively. Per annual filings, the apparent steel consumption (ASC) in the U.S., Europe, Brazil, and CIS regions are likely to expand at an average rate by 2%, 1%, 9%, and 1%, respectively, in 2022. The growth is projected to be led by the automobile and infrastructure sectors as supply chain issues and labor force participation rate alleviates with macroeconomic recovery. With $9.9 billion of cash from operations, the company invested $3 billion in property, plant & equipment and financed $5 billion of share buybacks at an average price of $30.

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Stock Has Outperformed Broader Markets

MT stock declined from levels of around $17 in February 2020 (pre-crisis peak) to levels of around $7 in March 2020 (as the markets bottomed out), implying MT stock lost 60% from its approximate pre-crisis peak. It observed a strong rally post broader market sell-off and has reached $34 at present. In comparison, the S&P 500 Index first fell 34% as lockdowns were imposed in many countries and since has almost doubled in value.

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 Returns Mar 2022
MTD [1]
YTD [1]
Total [2]
 MT Return 7% 4% 51%
 S&P 500 Return 1% -7% 98%
 Trefis MS Portfolio Return 2% -9% 259%

[1] Month-to-date and year-to-date as of 3/28/2022
[2] Cumulative total returns since the end of 2016

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