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Investing.com - Barclays (LON:BARC) has downgraded Outokumpu OYJ (HEL:OUT1V) from Equalweight to Underweight, while reducing its price target to EUR3.00 from EUR3.30.
The downgrade reflects Outokumpu’s exposure to European stainless steel markets, where Barclays anticipates prolonged soft demand conditions and increased risk of circumvention around Carbon Border Adjustment Mechanism (CBAM) and trade measures.
Barclays also cited capital expenditure risk for Outokumpu, particularly into 2026 from maintenance catch-up needs, along with uncertainties regarding the company’s medium-term growth prospects.
The investment bank expects European pricing to develop sideways at least until year-end and likely into 2026. Despite early optimism about potential German stimulus benefits, Barclays notes that higher grade materials are primarily used indirectly in construction through appliances and white goods installed toward the end of building projects.
Given that permit data is only beginning to recover now and construction starts typically lag by six to nine months, Barclays believes a full recovery in completions could still be two to three years away, affecting both Outokumpu’s Europe division and indirectly its Ferrochrome division.
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