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On Thursday, Kepler Cheuvreux reinstated coverage on Aperam SA (APAM:NA) (OTC: OTC:APEMY) with a Buy rating and increased the price target to EUR31.10 from a previous target. The firm’s analyst highlighted Aperam (AS:APAM)’s strategic investments and cost-saving initiatives as key drivers for the company’s enhanced performance. According to InvestingPro data, the stock appears undervalued with a P/B ratio of 0.59 and P/E ratio of 8.26, trading at $30.12.
Aperam, recognized as the second most cost-efficient stainless-steel manufacturer in Europe, has diversified its activities across the stainless-steel value chain, including recycling & reuse (R&R), services & solutions (S&S), alloys & specialties (A&S), and stainless & electrical steel (S&E). This diversification is part of the company’s savings plan, which has been in place since 2011 and aims to increase its normalized adjusted EBITDA by EUR300 million to more than EUR700-800 million.
The analyst believes Aperam is well-positioned to benefit from the recovery of the European economy, particularly in Germany. The company’s strategic moves have made it a stronger entity with the capability to leverage its position as the only producer in the expanding Brazilian stainless-steel market. With an impressive dividend yield of 5.99% and positive earnings forecasts for 2025, the company shows strong potential for investors seeking both growth and income opportunities.
Additionally, Aperam’s integration of Universal Stainless & Alloy Products has provided it with increased exposure to the growing alloys and specialty markets, including the US and aerospace sectors. This move is expected to further diversify the company’s revenue streams and reduce its dependency on the cyclical nature of the stainless-steel business, which now accounts for less than 50% of its adjusted EBITDA.
The analyst’s positive outlook on Aperam is also based on the company’s unique exposure to the entire stainless-steel value chain, from recycling to specialized solutions, which is anticipated to support its growth trajectory in the forthcoming years.
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