Intel stock spikes after report of possible US government stake
Investing.com -- Wells Fargo has initiated coverage on ArcelorMittal SA with an “equal weight” rating and a price target of $33, reflecting a 4.5x 2026 estimated EV/EBITDA multiple.
The valuation is slightly above the company’s 10-year average of 4.3x, based on a stronger balance sheet and shareholder returns.
The brokerage notes that while tariff adjustments could benefit the steelmaker, there is low conviction in near-term improvement in U.S. trade restrictions or the introduction of new trade barriers elsewhere.
Wella Fargo points to potential upside from tariff relief in the U.S., particularly for Canadian exports that could help ArcelorMittal’s Dofasco operations, as well as from stricter trade barriers in Brazil and the European Union.
However, it warns that the timing and scale of such measures remain uncertain.
The report also highlights the company’s aggressive expansion in India, aiming to increase production capacity to 15 million metric tons by the end of 2026 from a recent 7-7.5 million metric tons.
Growth projects in Liberia and North America are also expected to contribute.
Challenges remain in key markets. European and Brazilian steel prices are considered unsustainably low, but any rebound depends on government action to strengthen trade protection.
In the U.S., recent 50% steel import tariffs are estimated to be costing the company around $150 million per quarter.
Wells Fargo’s 2025 EBITDA estimate is $6.85 billion, with 2026 expected at $7.84 billion. The Q3 2025 forecast of $1.6 billion is slightly above consensus.
While noting the benefits of ongoing capacity expansions, asset pruning, and selective decarbonization investments, the bank cautions that the current share price already factors in some potential positive developments.
Any catalysts from trade policy changes or market recovery may take several quarters to materialize.