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Steel Stocks Recoup Losses after MT’s Earnings Lift Sentiments

PART:
1 2 3 4
Part 3
Steel Stocks Recoup Losses after MT’s Earnings Lift Sentiments PART 3 OF 4

How Do Markets View ArcelorMittal after Its 3Q17 Earnings Beat?

3Q17 earnings beat

ArcelorMittal (MT) released its 3Q17 earnings on November 10. It generated operating income of $1.2 billion in 3Q17.

While ArcelorMittal’s operating income fell on a sequential basis, it rose 2.5% YoY (year-over-year) in 3Q17. In the first nine months of 2017, ArcelorMittal has generated an operating income of $4.2 billion, which is 25.3% higher than in 3Q16.

How Do Markets View ArcelorMittal after Its 3Q17 Earnings Beat?

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ArcelorMittal’s 3Q17 earnings were better than expected. The company also offered a rosy outlook of global steel markets during its 3Q17 earnings call.

Analysts’ recommendations

According to the consensus estimates compiled by Thomson Reuters, ArcelorMittal has a mean one-year target price of 28.87 euros, which represents a 14.8% upside over its closing price on November 10. By contrast, the stock carried a one-year target price of 28.01 euros on November 9—one day before its earnings release.

ArcelorMittal now has a “strong buy” rating from five analysts, while 11 analysts rate the stock a “buy.” Three analysts rate the stock a “hold,” and the remaining two analysts polled by Thomson Reuters on November 10 rate the stock as a “sell” or some equivalent.

Recent action

As of November 11, only Deutsche Bank has raised ArcelorMittal’s price target since the company’s 3Q17 earnings release. Among other steel stocks (STLD), while analysts raised U.S. Steel’s (X) and Nucor’s (NUE) price targets post their respective 3Q17 earnings release, AK Steel’s (AKS) 3Q17 earnings and guidance disappointed markets and several analysts lowered their price target on the stock. You can read Analysts Take a Fresh Look at US Steel Stocks after 3Q17 to see how analysts changed their ratings on steel stocks after 3Q17 earnings.

In the next and final article of this series, we’ll look at the data points that steel investors will be following closely this week.

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