Yahoo Finance Here's Why You Should Buy ArcelorMittal (MT) Stock Right Now
ArcelorMittal’s MT stock looks promising at the moment. The steel giant is expected to benefit from improved market conditions and cost-improvement actions. We are positive on the company’s prospects and believe that the time is right for you to add the stock to portfolio as it looks promising and is poised to carry the momentum ahead.
ArcelorMittal has a Zacks Rank #1 (Strong Buy) and a VGM Score of A. Our research shows that stocks with a VGM Score of A or B, combined with a Zacks Rank #1 or 2 (Buy), offer the best investment opportunities for investors.
Let’s delve deeper into the factors that make ArcelorMittal an attractive choice for investors right now.
Estimates Northbound
Over the past two months, the Zacks Consensus Estimate for ArcelorMittal for 2023 has increased around 11.7%. The consensus estimate for 2024 has also been revised 4.2% upward over the same time frame. The favorable estimate revisions instill investor confidence in the stock.
Positive Earnings Surprise History
ArcelorMittal’s earnings outpaced the Zacks Consensus Estimate in each of the trailing four quarters, the average being 94.4%.
Valuation Looks Attractive
ArcelorMittal’s shares are currently trading at a level that is lower than the industry average, suggesting that the stock still has upside potential.
Going by the EV/EBITDA (Enterprise Value/ Earnings before Interest, Tax, Depreciation and Amortization) multiple, which is often used to value steel stocks, ArcelorMittal is currently trading at trailing 12-month EV/EBITDA multiple of 1.65, cheaper compared with the industry average of 4.83.
Growth Drivers in Place
ArcelorMittal is expected to benefit from improved demand conditions in 2023 following aggressive destocking. The company sees world apparent steel consumption, excluding China, to recover by 2-3% year over year in 2023. ArcelorMittal also expects its steel shipments to grow by roughly 5% year over year in 2023.
While real consumption growth is anticipated to remain lackluster in the United States, MT expects the end of destocking to lead to a rise in apparent consumption by 1.5-3.5% in 2023. The company also envisions apparent demand in Europe to recover by 0.5-2.5% in 2023.
ArcelorMittal also expects a strong recovery in economic growth in China in 2023 as COVID-19 restrictions are being lifted. However, factoring in the sustained softness in real estate during the year, it projects steel consumption to stabilize in 2023 (+1% to -1%) with potential upside dependent on China government’s infrastructure stimulus.
Moreover, the company is expanding its steel-making capacity and remains focused on shifting to high-added-value products. As part of this move, ArcelorMittal is expanding its automotive steel line of products. The company is expanding its global portfolio of automotive steels by launching a new generation of advanced high-strength steels
The company’s cost-improvement initiatives will also support profitability. MT, in 2022, set out a new value plan worth $1.5 billion to maintain cost position, to be achieved over three years. The plan is focused on creating value through commercial and operational improvements. These include volume, mix and variable cost improvement. The company realized improvements of $0.4 billion from actions taken in 2022.
ArcelorMittal Price and Consensus
ArcelorMittal price-consensus-chart | ArcelorMittal Quote
Stocks to Consider
Other top-ranked stocks worth considering in the basic materials space include Steel Dynamics, Inc. STLD, Olympic Steel, Inc. ZEUS and Nucor Corporation NUE.
Steel Dynamics currently sports a Zacks Rank #1. The Zacks Consensus Estimate for STLD's current-year earnings has been revised 26.4% upward in the past 60 days. You can see the complete list of today’s Zacks #1 Rank stocks here.
Steel Dynamics’ earnings beat the Zacks Consensus Estimate in each of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 11.3%, on average. STLD has gained around 28% in a year.
Olympic Steel currently sports a Zacks Rank #1. The Zacks Consensus Estimate for ZEUS's current-year earnings has been revised 60.6% upward in the past 60 days.
Olympic Steel’s earnings beat the Zacks Consensus Estimate in each of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 26.2%, on average. ZEUS has rallied around 40% in a year.
Nucor currently carries a Zacks Rank #1. The Zacks Consensus Estimate for NUE’s current-year earnings has been revised 10.7% upward in the past 60 days.
Nucor beat Zacks Consensus Estimate in each of the last four quarters. It delivered a trailing four-quarter earnings surprise of 7.7% on average. NUE’s shares have gained roughly 3% in the past year.
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Steel Dynamics, Inc. (STLD) : Free Stock Analysis Report
ArcelorMittal (MT) : Free Stock Analysis Report
Nucor Corporation (NUE) : Free Stock Analysis Report
Olympic Steel, Inc. (ZEUS) : Free Stock Analysis Report
