Wall Street Views: Can ArcelorMittal Continue Its Good Run?
Wall Street views
ArcelorMittal (MT) has gained 25.8% in 2017 based on September 12 closing prices. Notably, while ArcelorMittal is trading with decent year-to-date (or YTD) gains, US steelmakers including U.S. Steel (X) and AK Steel (AKS) are trading with YTD losses. To be fair, MT isn’t exactly comparable to X and AKS. ArcelorMittal gets only about a quarter of its revenues through NAFTA (the North American Free Trade Agreement) and is, therefore, less dependent on US markets than US-based steelmakers (CLF). In this article, we’ll see how analysts are rating ArcelorMittal after a strong 2017.
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According to the data compiled by Thomson Reuters, ArcelorMittal has received a “strong buy” rating from five analysts while 12 analysts rate the stock a “buy” or some equivalent. Two analysts have a “sell” rating on ArcelorMittal while the remaining four analysts rate the stock a “hold.” ArcelorMittal carries a mean consensus price target of 27.69 euros (~$33.17), which represents a 20.6% upside over its September 12 closing prices.
Overall, analysts seem bullish about ArcelorMittal. Although there has been no notable analyst action recently, some analysts had raised the stock’s target price after its 2Q17 earnings release. ArcelorMittal’s 2Q7 earnings were better than expected. The company also raised its 2017 global steel demand forecast, citing strong growth in Chinese steel consumption.
Notably, along with steel prices, ArcelorMittal is also impacted by movement in iron ore prices due to its vast iron ore operations. Iron ore prices have come off their 2017 highs despite higher Chinese imports.
In the next part of this series, we’ll see how analysts are rating Nucor (NUE).