(MT) ArcelorMittal – Bear of the Day

We are maintaining our Underperform recommendation on ArcelorMittal (MT) following our assessment of its second-quarter 2012 results. Earnings beat the Zacks Consensus Estimate while revenues fell year over year and missed the forecast. ArcelorMittal remains affected by the challenging economic conditions in Europe.

The company is also exposed to volatility in steel pricing and tough competition, and has significant debt which is almost equal to its market capitalization. Steel industry oversupply due to imports and Chinese production has pressured prices and might further lead to price declines. Moreover, weakness in end markets due to macroeconomic uncertainty is another area of concern.

Our long-term Underperform recommendation on the stock indicates that it will perform below the broader market. Our price target of $15 is based on 13.2x our fiscal 2012 earnings estimate.

Zacks Investment Research

About vitalstocks

This is a sample profile field. Vitalstocks is the operating company for Stockbloghub. This will place the picture of the author or company in the profile. Here is another extra line of information.

Comments

Powered by Facebook Comments


Similar Posts: | | Basic Materials | Steel & Iron

RSS feeds: Arcelor Mittal | MT | Basic Materials | Steel & Iron |

Other Posts by | RSS Feed for this author