ArcelorMittal: BofA upgrades stock

(CercleFinance.com) - On Thursday Bank of America upgraded ArcelorMittal shares from 'neutral' to 'buy', with a target price raised from E28 to E31.


BofA praises the steelmaker's orchestrated geographic reorientation from Europe to North America, which now represents its main market, generating around 28% of the group's operating income.

The analyst also points out that recent strategic investments by the world's leading steelmaker have been mainly aimed at markets outside Europe.

It believes that this shift is favorable, given that the valuation multiple for the US sector (around 8.5x) is currently more than twice that of Europe (3.5x).

BofA also mentions the company's controlled spending on decarbonizing its business, which should limit the medium-term impact on cash flow.

With a net debt/EBITDA ratio of less than one, BofA expects the company to continue to buy back shares, and to look for other value-creating opportunities in the future.


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