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by Zacks Equity ResearchMay 22, 2012 | Comments : 0 Recommended this article: (0)
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The company's net debt climbed by roughly $1.1 billion in the quarter. ArcelorMittal also reduced its growth outlook for steel and announced a few divestments including the sale of its steel foundation distribution business to Nucor Corporation. These divestments are a part of the company's strategy to dispose its non-core assets, a move which it expects to continue in the second quarter.
ArcelorMittal remains affected by the challenging economic conditions in Europe. It is also exposed to volatility in steel pricing and tough competition. Our long-term Underperform recommendation on the stock indicates that it will perform below the broader market. Our price target of $13 is based on 6.5x our fiscal 2012 earnings estimate.
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