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On Friday, CFRA raised the price target on ArcelorMittal (NYSE:MT:NA) (NYSE: MT) shares from EUR26.00 to EUR29.00, while keeping a Hold rating on the stock. According to InvestingPro data, the company currently trades at an EV/EBITDA of 3.67x, suggesting potential upside. Wan Nurhayati, a CFRA analyst, noted the adjustment was based on an enterprise value to earnings before interest, taxes, depreciation, and amortization (EV/EBITDA) multiple of 4.5 times, which aligns with the company’s historical average.
The analyst pointed out that ArcelorMittal’s strategic growth projects are expected to drive growth in the medium term. As a prominent player in the Metals & Mining industry with a market capitalization of $24.8 billion, the company shows strong financial health according to InvestingPro metrics. Additionally, the trend towards energy transition is anticipated to bolster the long-term demand for steel. However, Nurhayati cautioned that geopolitical tensions and trade uncertainties, particularly due to the policies of U.S. President Trump and reactions from other nations, could lead to short-term market volatility. This includes the 25% U.S. tariff on all steel imports that came into effect on March 12, 2025.
ArcelorMittal had previously indicated that the steel tariffs imposed by the U.S. on Canada and Mexico in 2018 had an adverse impact on the company, costing approximately $100 million each quarter. Despite these costs, the company reported that the losses were more than compensated for by increased revenue.
The analyst’s statement underscores the potential challenges and opportunities facing ArcelorMittal in the current market environment. While the company has strategies in place to promote growth and benefit from the energy transition, it must also navigate the complexities introduced by international trade policies and their economic repercussions. Recent performance has been promising, with the stock showing a 36.7% return over the past six months. For deeper insights into ArcelorMittal’s valuation and growth prospects, including 13 additional ProTips and comprehensive financial analysis, visit InvestingPro.
In other recent news, ArcelorMittal reported stronger-than-expected earnings, with its iron ore division significantly contributing to an EBITDA of $1.65 billion for the December quarter. This exceeded analysts’ forecasts, although the company’s steel division saw a decline in EBITDA, particularly in North America. Additionally, ArcelorMittal declared a 10% year-over-year increase in its dividend to $0.55 per share. Goldman Sachs responded by raising its price target to EUR26.10, maintaining a Neutral rating. Meanwhile, Morgan Stanley (NYSE:MS) downgraded ArcelorMittal from Overweight to Equal-weight, citing a disproportionate stock rally compared to potential earnings impact from increased shipments to Ukraine. JPMorgan also adjusted its price target to EUR30.50, keeping a Neutral stance, while highlighting potential geopolitical risks and the company’s commitment to shareholder returns. Furthermore, European steel stocks, including ArcelorMittal, experienced a boost following Germany’s plans to increase infrastructure and defense spending, along with China’s pledge to cut steel output. These developments have provided a mixed outlook for the company amid ongoing global trade tensions and market dynamics.
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