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Investing.com -- Deutsche Bank (ETR:DBKGn) has upgraded its recommendation on Outokumpu to “buy” from “hold,” citing reduced worst-case concerns and an updated assessment of tariff risks.
While the broader sector faces uncertainty due to recently imposed U.S. tariffs, Deutsche Bank notes that Outokumpu’s fundamentals now support a more constructive view.
The bank has slightly lowered its target price for Outokumpu to €3.70 from €3.80, a 2.6% cut, reflecting revised demand and pricing assumptions.
This adjustment comes as part of a broader reset in expectations across the European steel sector, where analysts have downgraded 2026 EBITDA forecasts by around 7% on average.
Despite this, Outokumpu is seen as better positioned relative to peers, especially given its capacity to manage through potential downside scenarios without severe impact on free cash flow at the bottom of the cycle.
Analyst Bastian Synagowitz highlighted the complex implications of the U.S. tariff environment on steel demand, which remains difficult to disaggregate across end markets. Nonetheless, Outokumpu’s outlook has improved sufficiently to warrant a more optimistic stance.
Other top picks in the space, according to Deutsche Bank, include Acerinox (BME:ACX), Aperam (AS:APAM), and Voestalpine (LON:0MKX).
Despite not being a ’top pick,’ Outokumpu’s recent upgrade reflects a positive outlook on its resilience amidst market volatility and global uncertainties.