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JPMorgan lowered its price target on Outokumpu OYJ (HEL:OUT1V) (OTC:OUTFF) to EUR3.70 from EUR4.00 on Thursday, while maintaining its Neutral rating on the Finnish stainless steel producer.
The price target adjustment follows Outokumpu’s 2025 Capital Markets Day where the company unveiled its new "EVOLVE" corporate strategy for 2026-30. The strategy establishes strict investment hurdle rates, requiring over 15% internal rate of return for existing business investments and over 20% for growth opportunities in new business areas.
Outokumpu announced EUR200 million in growth capital expenditure for 2026-30 to construct a new production line at its Tornio facility in Finland, while simultaneously closing two lines in Germany. The company also plans to leverage its Kemi ferrochrome mine in Sweden to produce higher-grade ferrochrome with chromium content exceeding 65% using proprietary technology.
JPMorgan reduced its second-quarter EBITDA estimate for Outokumpu by 26% to EUR55 million, factoring in the company’s guided EUR35 million impairment. The revised estimate sits 20% below the Bloomberg consensus forecast.
The investment bank’s full-year 2025 EBITDA projection of EUR263 million for Outokumpu now stands 8% below consensus estimates, with analysts noting they added EUR200 million (EUR0.40 per share) to their valuation model to account for the Tornio expansion project.
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