ArcelorMittal: share price falls, MS deems rebound exaggerated

(CercleFinance.com) - ArcelorMittal's shares are sailing against the tide of European stock markets this Friday, posting a sharp fall after Morgan Stanley downgraded the stock, which it considers to have exaggerated its recent rebound.


At around 11.10 am, the steelmaker's shares were down 1.5%, while the CAC 40 and AEX were up 0.4% and 0.2% respectively.

In a note, Morgan Stanley considers that the upward trend in the share price in recent weeks, fueled by hopes of a peace agreement in Ukraine, has gone too far.

"The group is seen as a direct beneficiary of any reconstruction in Ukraine, given its large industrial footprint in the country", the research firm points out.

Despite this, the company's valuation on the stock market seems disproportionate to the impact on earnings of an upturn in deliveries from Ukraine (of the order of $400 million)," it believes.

Analysts have consequently lowered their recommendation to 'weight in line' from 'overweight', while maintaining their target price of 29.8 euros.

The stock has surged by more than 30% since January 9, not only on the back of hopes surrounding a possible resolution of the Ukrainian conflict, but also on the back of solid annual results, with ArcelorMittal having declared that it expects global steel demand to rise in 2025.

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