ArcelorMittal (MT, Financial) has finalized an agreement to divest its businesses in Bosnia and Herzegovina, including ArcelorMittal Zenica, a steel manufacturing plant, and ArcelorMittal Prijedor, an iron ore mining operation that supplies Zenica. These assets are set to be acquired by Pavgord Group as part of ArcelorMittal's strategic decision to enhance business and workforce growth by selling them. Despite previous investments to retain the facilities within the group, the sale was deemed the optimal path forward.
As part of the transaction terms, ArcelorMittal's shares in both Zenica and Prijedor will transfer to Pavgord Group, along with the transition of all employee positions. While the company anticipates a non-cash loss of around $0.2 billion from the disposal, the transaction is expected to conclude in the third quarter of 2025, pending regulatory approvals and other conditions. Until the deal is finalized, ArcelorMittal will maintain regular operations with ongoing support from its local and corporate management teams.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 5 analysts, the average target price for ArcelorMittal SA (MT, Financial) is $31.66 with a high estimate of $34.00 and a low estimate of $29.70. The average target implies an upside of 3.94% from the current price of $30.46. More detailed estimate data can be found on the ArcelorMittal SA (MT) Forecast page.
Based on the consensus recommendation from 5 brokerage firms, ArcelorMittal SA's (MT, Financial) average brokerage recommendation is currently 2.0, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for ArcelorMittal SA (MT, Financial) in one year is $26.24, suggesting a downside of 13.85% from the current price of $30.46. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the ArcelorMittal SA (MT) Summary page.
MT Key Business Developments
Release Date: April 30, 2025
- EBITDA per tonne: $116 in the quarter, double compared to previous cyclical lows.
- Underlying Free Cash Flow: Approximately $700 million, excluding seasonal working capital investment and discretionary growth CapEx.
- Mining Segment Performance: Liberia achieved records for both production and shipments.
- Operational Performance: Consistent operations in Europe and normalized levels in North America.
- Strategic Growth Contribution: Expected to contribute EUR 1.2 billion to structurally higher EBITDA over the next few years.
- Capital Return Policy: Initiated a new long-term share buyback program through 2030.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- ArcelorMittal SA (MT, Financial) reported strong operational performance and cash flows, with the mining segment in Liberia achieving record production and shipments.
- The company has a resilient financial performance, with EBITDA per tonne doubling compared to previous cyclical lows, demonstrating its transformation and higher margins.
- ArcelorMittal SA (MT) is well-positioned to benefit from global trade actions, with Europe and India introducing new safeguards to create a level playing field.
- The company has initiated a new long-term share buyback program through 2030, demonstrating confidence in its financial stability and commitment to returning capital to shareholders.
- Growth projects, such as the Liberia expansion and the new state-of-the-art EIF at Calvert, are on track and expected to contribute significantly to future EBITDA and cash flow.
Negative Points
- The journey to achieve zero fatalities and serious injuries is expected to take three years, indicating ongoing safety challenges.
- The impact of tariffs on demand remains uncertain, posing a risk to future order books and market conditions.
- High energy costs in Europe continue to be a concern, potentially affecting the competitiveness of ArcelorMittal SA (MT)'s operations.
- The company faces challenges in India with land acquisition and environmental licensing for its new greenfield steel plant, which could delay project timelines.
- The decision to cancel the Monlevade expansion project in Brazil due to prohibitive costs highlights potential financial constraints and strategic reevaluations.
