Express Verdict — 2 Minutes
B+
Bullish — 65% Confidence — Value/Cyclical Profile
What the Company Does
ArcelorMittal S.A. is the world's #2 steelmaker (after Baowu Steel), headquartered in Luxembourg. The group operates an integrated chain: iron ore mining (Brazil, Liberia, Ukraine, Canada), steel production (semi-finished, flat, long, tubes), and sales to the automotive, construction, energy, packaging, and infrastructure sectors. With €51.7B in revenue, 155,000 employees across 60 countries, and €5.0B EBITDA, ArcelorMittal is the undisputed leader in steel outside China. The group is also a major mining player with 42Mt of iron ore production in 2025.
3 Reasons to Buy
- Fire-sale valuation — P/B 0.86x, EV/EBITDA 9.6x for the global leader ex-China
- Earnings x2.5 in 2025 — Net income €2.65B vs €1.13B, 4 consecutive EPS beats
- CBAM + EAF catalysts — European carbon border protection + €1.35B incremental EBITDA in pipeline
3 Reasons to Avoid
- Pure cyclical — Steel sector highly sensitive to global economic cycle
- Chinese overcapacity — +165Mt excess capacity by 2027, price pressure
- Extreme VWAP — "Extreme overbought" position vs long-term VWAP, correction risk
Current Setup
Massive rally underway — MT has surged from ~€19 (2025 low) to €51.90, representing +168% in 12 months. RSI at 65.5 is in neutral-high territory without being overbought. Price is well above all moving averages (EMA 20: €48.30, EMA 50: €43.45, EMA 200: €34.20), signaling powerful bullish momentum. Q4 2025 results beat expectations (EPS €0.72 vs €0.46 expected, +57%), triggering a Jefferies upgrade (Buy, €62) and Citi raise (Buy, €66). Consensus is Buy with €49.70 target, which the stock has already exceeded. Wyckoff phase is identified as "markup". Main risk is a technical correction after this vertical rally.
Fundamentals
| Metric | Value | Signal |
|---|
| Revenue (TTM) | €51.7B (+1.7% YoY) | Stabilization |
| EBITDA | €5.0B | 9.6% Margin |
| Net Income | €2.65B | x2.5 vs 2024 |
| Gross Margin | 9.6% | Typical for steel |
| Operating Margin | 3.5% | Improving |
| Net Margin | 5.1% | Sharp increase |
| ROE | 6.0% | Modest |
| ROA | 2.0% | Capital intensive |
| EV/EBITDA | 9.6x | Discount vs historical |
| EV/Revenue | 0.93x | Very low |
| P/Book | 0.86x | Below book value |
| Book Value/Share | €60.30 | €8 above price |
| Beta | 1.65 | Highly cyclical |
| Analyst Target | €49.70 | Buy (already reached) |
| Recommendation | Buy | Positive consensus |
EPS History (Last 4 Quarters)
| Quarter | Actual EPS | Estimated EPS | Surprise |
|---|
| Q1 2025 | €0.88 | €0.62 | +42.5% |
| Q2 2025 | €1.11 | €1.53 | -27.1% |
| Q3 2025 | €0.52 | €0.46 | +12.1% |
| Q4 2025 | €0.72 | €0.46 | +56.4% |
Spectacular Earnings Rebound
ArcelorMittal multiplied its net income by 2.5x in 2025 (€2.65B vs €1.13B in 2024), demonstrating powerful operating leverage. 3 out of 4 quarters show EPS beats, with Q4 at +57% surprise. The only miss (Q2 at -27%) reflects steel seasonality. The annual EBITDA of €5.5B, combined with projects in progress (+€1.35B incremental EBITDA), positions ArcelorMittal for a significant repricing cycle. The P/B of 0.86x is remarkable: the market values ArcelorMittal below the book value of its assets.
Insiders & Institutions
Dominant Family Ownership
The Mittal family, via Ispat International and Significant Shareholder Group, holds approximately 38% of the capital, making ArcelorMittal a controlled company. Lakshmi N. Mittal, Executive Chairman, and his son Aditya Mittal, CEO, lead the group. This concentrated ownership ensures a long-term vision but limits available float (~420M out of 761M shares). Institutional investors (Vanguard, BlackRock, Capital Group) hold most of the float.
Management
| Executive | Position | Note |
|---|
| Lakshmi N. Mittal | Chairman | Founder of Ispat, architect of Arcelor-Mittal merger (2006) |
| Aditya Mittal | CEO | CEO since 2021, formerly CFO and CEO Europe |
| Genuino Christino | CFO | Drives financial discipline and cash return |
Capital Structure
| Component | Value | Note |
|---|
| Market Cap | €39.5B | World #2 steel |
| Enterprise Value | €47.9B | EV/EBITDA 9.6x |
| Cash & Equivalents | €4.6B | Solid |
| Total Debt | €11.3B | Manageable |
| Net Debt | €6.7B | ~1.3x EBITDA |
| Shares Outstanding | 761M | Declining (buybacks) |
| Book Value/Share | €60.30 | Above price |
| Dividend | €0.51/share | +9% vs 2025 |
Book Value Discount: Opportunity or Trap?
ArcelorMittal trades at 0.86x book value, meaning the market values the group's total assets 14% below their accounting value. Book value per share of €60.30 is €8 above the current price of €51.90. This type of discount is typical for cyclicals at cycle lows, but 2025 earnings (x2.5) and 2026 catalysts (CBAM, EAF, mining expansion) suggest an ongoing repricing. Net debt of €6.7B (1.3x EBITDA) is controlled. Dividend of €0.51 (+9%) and buybacks confirm management confidence.
Short Interest
| Metric | Value | Signal |
|---|
| Short Interest | 2.37M shares | Very low |
| % of Float | 0.56% | Minimal |
| Days to Cover | 1.45 days | Quick coverage |
| Cost to Borrow | 0.42% | Very low |
| Shares Available | 850,000 | Average availability |
| Float | 419.9M shares | Liquid |
No Bear Conviction
With only 0.56% of float shorted and a CTB of 0.42%, short sellers are not betting against ArcelorMittal. Days-to-cover of 1.45 days is extremely low, meaning existing short positions are marginal. Share availability for borrowing (850K) is down from the historical average (~1.5M), which could indicate strengthening long positions. This is a bullish signal — despite the +168% rally, bears are not daring to short the move.
Technical Analysis
| Indicator | Value | Signal |
|---|
| Price | €51.90 | Uptrend |
| EMA 20 | €48.30 | Price above (+7.4%) |
| EMA 50 | €43.45 | Price above (+19.4%) |
| EMA 200 | €34.20 | Price above (+51.7%) |
| RSI (14) | 65.5 | Neutral-high, not overbought |
| MACD | 3.89 | Above signal (3.49) |
| ATR | €2.22 | ~4.3%/day |
| OBV | 71.5M | Neutral trend |
| LT VWAP | €24.53 | Extreme overbought |
| Wyckoff | Markup | Bullish phase |
Key Levels
| Type | Price | Note |
|---|
| Support | €48.30 | EMA 20 — First dynamic support |
| Support | €43.45 | EMA 50 — Intermediate support |
| Support | €34.20 | EMA 200 — Major support |
| Support | €25.70 | Historical S/R — 2024 range base |
| Resistance | €55.60 | Citi Target — Next resistance |
| Resistance | €60.30 | Book Value — Psychological level |
Price Evolution (4 months)
Parabolic Rally in Markup Phase
MT is in a powerful uptrend: price is 7.4% above EMA 20, 19.4% above EMA 50, and 51.7% above EMA 200. Wyckoff phase is identified as "markup", confirming institutional accumulation. MACD is positive and above its signal, RSI at 65.5 is in bullish territory without being overbought (70+). However, long-term VWAP at €24.53 with an "extreme overbought" position (+111%) is a warning signal: historically, such extreme extensions precede consolidations. Optimal entry point would be a pullback toward EMA 20 (€48.30) or EMA 50 (€43.45).
Sector & Comparables
| Ticker | Name | MCap | EV/EBITDA | P/B |
|---|
| MT | ArcelorMittal | €39.5B | 9.6x | 0.86x |
| NUE | Nucor Corp. | ~€29B | ~8x | ~1.8x |
| STLD | Steel Dynamics | ~€17B | ~7x | ~2.5x |
| X | U.S. Steel | ~€7B | ~12x | ~0.9x |
| CLF | Cleveland-Cliffs | ~€5B | ~10x | ~1.2x |
| TKAMY | ThyssenKrupp | ~€4B | ~15x | ~0.4x |
| SSAB | SSAB (Sweden) | ~€7B | ~6x | ~1.5x |
Correlations
| Asset | Correlation | Interpretation |
|---|
| BHP (Mining) | 0.64 | Strong mining/commodities correlation |
| FCX (Freeport) | 0.64 | Metals/copper correlation |
| EFA (Europe) | 0.67 | High European proxy |
| IWM (Russell) | 0.56 | Cyclical correlation |
| SPY (S&P 500) | 0.01 | Nearly uncorrelated to S&P |
| QQQ (Nasdaq) | -0.08 | Inverse rotation vs tech |
| GLD (Gold) | 0.21 | Weak commodities correlation |
ArcelorMittal is the sector giant with €51.7B in revenue, nearly 2x Nucor. Its P/B of 0.86x is the most attractive among peers (except ThyssenKrupp at 0.4x, in distress). US mini-mills (Nucor, STLD) show higher margins thanks to EAF technology and the protected US market. ArcelorMittal compensates through geographic diversification (60 countries) and vertical integration (mining). Near-zero correlation with S&P 500 (0.01) and negative correlation with Nasdaq (-0.08) make MT an excellent diversifier for tech-heavy portfolios.
Macro Context
| Factor | Situation | Impact on MT |
|---|
| European CBAM | Carbon border mechanism active | Very positive |
| US Tariffs (Section 232) | 25% on steel imports maintained | Protects US sites |
| Chinese Overcapacity | +165Mt excess by 2027 (OECD) | Structural pressure |
| 2026 Steel Demand | +2% global ex-China (Worldsteel) | Modest recovery |
| European Construction | Expected rebound, -2% in 2024 | Slow improvement |
| Automotive | -9.8% EU production in 2024 | Persistent weakness |
| US Infrastructure | IIJA (infrastructure law) executing | Sustained demand |
| India | Steel demand growth +7-8%/year | AM/NS JV expanding |
CBAM: Game-Changer for European Steel
The EU's CBAM (Carbon Border Adjustment Mechanism) is the most important catalyst for ArcelorMittal in Europe. This mechanism imposes a carbon cost on steel imports from countries without equivalent carbon pricing (China, India, Turkey). Combined with tariff rate quotas (TRQ), CBAM should reduce imports and improve utilization rates of European steel mills. ArcelorMittal estimates this dynamic, combined with ongoing investments, will add €1.35B EBITDA (€0.59B in 2026, €0.76B from 2027). The phase-out of EU ETS free allocations starting in 2026 accelerates the repricing.
Threat: Global Overcapacity
OECD estimates global steel overcapacity will exceed 700Mt by 2027 (+165Mt), pushing utilization rates below 70%. China increased its exports by +22.6% in 2024, flooding Asian and European markets with low-cost steel. This structural pressure keeps steel prices under pressure and limits ArcelorMittal's pricing power. CBAM mitigates this risk in Europe, but sites outside the EU remain exposed. A global recession combined with overcapacity would be the most negative scenario for MT.
Trade Idea (Swing)
Long on EMA 20 Pullback — Cyclical Momentum Play
Thesis
ArcelorMittal is in fundamental repricing phase: earnings x2.5, CBAM in Europe, mining expansion, Dunkirk EAF. P/B of 0.86x is an anomaly for a global leader in earnings growth phase. Optimal entry is a pullback toward EMA 20 (€48.30), dynamic support zone. TP1 €55.60 (Citi target, +14% from €49), TP2 €60.70 (book value, +24%). Stop at €42 (below EMA 50) protects against cyclical reversal. Catalyst is Q1 2026 earnings on April 30, expected to confirm earnings trajectory.
Invalidation & Sizing
Stop at €42 below EMA 50 of €43.45. Invalidation if EMA 50 breaks on volume, signaling cyclical momentum exhaustion. Size: 3-5% of portfolio. MT is a cyclical with beta 1.65, volatility (ATR €2.22, ~4.3%/day) requires conservative sizing. Stock is nearly uncorrelated to S&P 500 (0.01), making it an excellent diversifier. Scaled entry recommended: 50% on EMA 20 test (€48), 50% on EMA 50 test (€43).
Seasonality
Historically strongest months are March (+0.37%/day), January (+0.32%) and July (+0.28%). April and June are weakest. February (current month) shows average return of +0.24%, slightly positive.
Sources
Data
- Market Watch Gateway (real-time)
- Yahoo Finance / StockAnalysis
- AmericanBulls (signals)
- Fintel / ChartExchange (Short/CTB)
- EUROFER / Worldsteel (sector data)
Profile
- ArcelorMittal S.A. (NYSE: MT / Euronext: MT)
- Sector: Basic Materials
- Industry: Steel
- Founded: 1976, Luxembourg
Analysis
- Analyst consensus: Buy (€49.70)
- Citi: Buy (€66), Jefferies: Buy (€62)
- Revenue: €51.7B
- EBITDA: €5.0B
Disclaimer: This report is provided for informational purposes only. It does not constitute investment advice. MT is exposed to cyclical steel risks, global overcapacity and trade tensions. Consult a licensed financial advisor before any decision.
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