ArcelorMittal’s Low Valuation Offers Significant Upside, Despite European Market Woes, Says Deutsche Bank
Deutsche Bank analyst Bastian Synagowitz upgraded Arcelor Mittal NY (NYSE:MT) to Buy from Hold and raised the price target from $29 to $31.
Per the analyst, 75% of Arcelor Mittal’s steel earnings are tied into attractive markets that trade at a premium to the company.
Despite this, valuation multiples of 3-4x EV/EBITDA are (wrongly) held hostage by the European business (literally priced at zero), the analyst writes.
Synagowitz writes, weaker developed markets and a slowing Chinese sector have led to a significant correction in Arcelor Mittal’s shares.
The analyst projects a ‘tough’ second half of the year, with forecasts slightly below market expectations, but the physical cycle may be nearing its bottom.
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