Below are key drivers of ArcelorMittal's value that present opportunities for upside or downside to the current Trefis price estimate for ArcelorMittal:
ArcelorMittal is currently the largest steel manufacturer in the world and was formed by the merger of steel giants Arcelor and Mittal in 2006. The company has a production capacity of nearly 114 million metric tons of steel annually and has operations in 20 countries on four continents.
Headquartered in Luxembourg, the firm operates its business in five main operating segments: Brazil, Europe, NAFTA, Africa and Commonwealth of Independent States (ACIS), and Mining. More than 25% of the steel produced is in the Americas, nearly 50% in Europe, and the remainder in countries such as Kazakhstan, South Africa, and Ukraine. ArcelorMittal produces a variety of flat products such as sheets and plates and long products including bars and rods. The firm also produces pipes and tubes for various applications.
The European segment is the most valuable division for the firm, accounting for around 32% of the company's value. It is valuable for the following reasons:
The Europe division is characterized by strong underlying demand, driven by steady economic growth in Europe. The division's shipments and pricing have been negatively impacted by competition from cheap steel imports. However, with European trade authorities imposing anti-dumping duties on steel imports from a number of countries, the division's shipments and pricing are expected to recover over the forecast period.
Overcapacity in the steel industry has hit margins for many operators, as steel mills globally are running at around 70% of their actual capacity on average. While this saves some costs, there are significant fixed costs that cause margins to compress when capacity is not optimal. However, we have seen a rise in capacity utilization at steel firms in Q4 2018. As demand bounces back and capacity is optimized, we expect a recovery in margins for the likes of ArcelorMittal.
As developing nations like China and India witness robust economic growth, the demand for steel in Asia is expected to grow at a healthy pace. This should help the steel industry solve its overcapacity issue to some extent, and allow manufacturers to eventually increase steel prices. ArcelorMittal is also likely to benefit from its foray in India after the acquisition of Essar Steel.
We expect that improving economic conditions in the U.S. and Europe will drive industrial demand, which should, in turn, provide a boost to prices as well as shipments.
ArcelorMittal (NYSE: MT) has seen its stock price decline by over 33% from $30 to $20 over the last six months. The company’s current stock price of a little over $22 reflects a forward price-to-earnings (P/E) ratio of approximately 6x, which is lower than the average forward P/E multiple of 7. ...More
ArcelorMittal (NYSE: MT) released its Q4 2018 results on February 7, 2019 followed by a conference call with analysts. The company beat market expectations for revenue as well as earnings per share. Revenue of $18.3 billion in Q4 2018 was 3.5% higher on a year-on-year basis, whereas EPS increased by 15.7% to $1.18 in Q4 2018, compared to $1.02 in Q4 2017. ...More
ArcelorMittal (NYSE: MT) will release its results for the year 2018 on February 7, 2019 and conduct a conference call with analysts the same day. Market consensus projects the company to post an EPS of $0.94 in the fourth quarter of 2018, higher than $0.89 in Q4 2017. The market expects revenue to grow by 11.0% to $76.3 billion for the year 2018, compared to $68. ...More
ArcelorMittal (NYSE: MT) is the world's leading steel and mining company, supplying quality steel in the global markets. In 2017, the company had revenues of $68.7 billion and crude steel production of 93.1 million metric tons. ...More
ArcelorMittal (NYSE: MT) released its second-quarter results and conducted a conference call with analysts on 1st August 2018. The company reported robust results with an EBITDA of $3.07 billion, surpassing market EBITDA estimates by almost 8% and displaying a growth rate of 45% on a year-on-year (y-o-y) basis. ...More
ArcelorMittal (NYSE: MT) will release its second-quarter results on 1st August 2018 and conduct a conference call with analysts the same day. Consensus market estimates expect the company to post an adj-EPS of $1.57 vis-à-vis an adj-EPS of $1.29 reported in the same period last year. ...More
ArcelorMittal (NYSE: MT) is the world's largest steel producer and the future growth prospects of the company looks bright with its latest approval of the European Commission (EC) for its planned acquisition of Ilva. ...More
ArcelorMittal (NYSE: MT) reported its first-quarter 2018 results and conducted a conference call with analysts on May 11. The company reported an adj-EPS of $1.17, vis-à-vis an adj-EPS of $0.33 reported in the same period last year. Revenue displayed a 19% year-on-year (y-o-y) growth and was reported at $19.19 billion. ...More
ArcelorMittal (NYSE: MT) will release its first-quarter 2018 results and conduct a conference call with analysts on 11th May. Consensus market estimates have a mean adj-EPS estimate of $1.05 per share vis-à-vis an adj-EPS of $0.33 reported in the same period last year. ...More
ArcelorMittal (NYSE: MT), the world's largest steel producer, reported a 20% rise in revenue in 2017 owing to a favorable demand environment for steel in the global economy. ...More
ArcelorMittal (NYSE: MT) released its Q4 2017 and full year earnings results and conducted a conference call with analysts on January 31. The company displayed a Year-on-Year (Y-o-Y) revenue growth rate of 25% in Q4 driven largely by a significant growth in its key markets. ...More
ArcelorMittal (NYSE: MT) will announce its Q4 2017 and full year 2017 earnings results and conduct a conference call with analysts on January 31. The graph below summarizes our expectations from the upcoming results. ...More
ArcelorMittal (NYSE:MT) in its news release announced the acquisition of Exosun, a leading French solar tracker manufacturer. The acquisition of Exosun marks ArcelorMittal's expansion toward downstream solar operations which could remain beneficial for the company in the years to come... ...More
The year 2017 was characterized by favorable business conditions prevailing in ArcelorMittal's (NYSE:MT) key markets of Europe and the U.S., in large part due to the reduced competition from steel imports. In addition to that, improving demand conditions for steel in ArcelorMittal's major markets has remained beneficial for the company. ...More
The Union Steel Minister of India has announced that the world's largest steel producer, ArcelorMittal, and the Indian state run steel producer, Steel Authority of India (SAIL), would be entering into a joint venture (JV) to establish an INR 5000 crore (approximately $765 million) steel plant in I... ...More
ArcelorMittal (NYSE:MT) displayed a strong quarter by reporting an EPS of $1.18/ share, beating the market estimate by $.032/ share. The Brazilian division of the company remained a highlight for this quarter which reported an increase in shipments of 7% Y-O-Y and 12% Q-O-Q. ...More
ArcelorMittal (NYSE:MT) will announce its third quarter results before the market opens on 10th Nov, 2017 and will conduct a conference call with analysts the same day. ...More
ArcelorMittal, the world's largest steel producer, reported a strong second quarter earnings result amid improved business conditions for steel in the U.S. and Europe. ...More
Stocks of steel companies operating in the U.S. have risen sharply over the past few days amid strengthening expectations of the White House instituting more measures to tackle the issue of unfairly traded steel imports. ...More
Chinese steel production continues to rise, fueled by domestic demand, as evidenced by the world steel production figures for April reported by the World Steel Association last week. Chinese steel production in the first four months of the year rose 4. ...More