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5 Reasons That Make ArcelorMittal (MT) Stock a Solid Pick Now
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ArcelorMittal’s (MT - Free Report) stock looks promising at the moment. The company has seen its shares rise roughly 11% over the past three months. We are positive on the company’s prospects and believe that the time is right for you to add the stock to portfolio as it looks promising and is poised to carry the momentum ahead.
Let’s take a look into the factors that make this steel giant a compelling choice for investors right now.
What’s Working in Favor of MT?
Solid Rank & VGM Score: ArcelorMittal currently has a Zacks Rank #1 (Strong Buy) and a VGM Score of A. Our research shows that stocks with a VGM Score of A or B combined with a Zacks Rank #1 or #2 (Buy), offer the best investment opportunities for investors. Thus, the company appears to be a compelling investment proposition at the moment.
An Outperformer: ArcelorMittal has outperformed the industry over a year. The company’s shares have rallied around 28.6% over this period, compared with roughly 12.1% growth recorded by the industry.
Estimates Northbound: Annual estimates for ArcelorMittal have moved up over the past month, reflecting analysts’ confidence on the stock. Over this period, the Zacks Consensus Estimate for 2018 has increased by around 2.8% to $5.59 per share. The Zacks Consensus Estimate for 2019 has also moved up 9.7% over the same timeframe to $5.56.
Attractive Valuation: Going by the EV/EBITDA (Enterprise Value/ Earnings before Interest, Tax, Depreciation and Amortization) multiple, which is often used to value steel stocks, ArcelorMittal is currently trading at trailing 12-month EV/EBITDA multiple of 4.8, cheaper compared with the industry average of 7.3.
Upbeat Prospects: ArcelorMittal, in its second-quarter call, said that it now expects global apparent steel consumption to grow in the range of 2-3% in 2018, up from the previous growth expectation of 1.5-2.5%. The company noted that market conditions are favorable and demand environment continues to be positive along with healthy steel spreads.
In the United States, the company projects apparent steel consumption growth of 2-3% in 2018 (up from 1.5-2.5% expected earlier), factoring in higher construction and machinery demand. The company also anticipates 2-3% growth in apparent steel consumption in Europe, up from 1-2% expected earlier, supported by strength across construction and machinery end-use markets.
Apparent steel consumption in China is also expected to increase 1-2% (up from -0.5% to 0.5%) in 2018, driven by consistent improvement in real estate demand, ongoing strong machinery and automotive demand, partly offset by slowdown in infrastructure.
ArcelorMittal remains focused on implementing strategic measures under its Action 2020 plan to drive profitability. The plan is a strategic roadmap for each of the company’s key segments, which targets a structural EBITDA improvement of about $3 billion. The company also remains on track with its cost-reduction actions under the program and is focused on deleveraging its balance sheet. Sustained commitment to reduce debt is leading to lower interest expenses.
Nucor has an expected long-term earnings growth rate of 12%. The company’s shares have gained around 20% in a year.
BHP Billiton has an expected long-term earnings growth rate of 5.3%. The company’s shares have gained around 23% in a year.
Huntsman has an expected long-term earnings growth rate of 8.5%. The company’s shares have gained around 7% in a year.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
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5 Reasons That Make ArcelorMittal (MT) Stock a Solid Pick Now
ArcelorMittal’s (MT - Free Report) stock looks promising at the moment. The company has seen its shares rise roughly 11% over the past three months. We are positive on the company’s prospects and believe that the time is right for you to add the stock to portfolio as it looks promising and is poised to carry the momentum ahead.
Let’s take a look into the factors that make this steel giant a compelling choice for investors right now.
What’s Working in Favor of MT?
Solid Rank & VGM Score: ArcelorMittal currently has a Zacks Rank #1 (Strong Buy) and a VGM Score of A. Our research shows that stocks with a VGM Score of A or B combined with a Zacks Rank #1 or #2 (Buy), offer the best investment opportunities for investors. Thus, the company appears to be a compelling investment proposition at the moment.
An Outperformer: ArcelorMittal has outperformed the industry over a year. The company’s shares have rallied around 28.6% over this period, compared with roughly 12.1% growth recorded by the industry.
Estimates Northbound: Annual estimates for ArcelorMittal have moved up over the past month, reflecting analysts’ confidence on the stock. Over this period, the Zacks Consensus Estimate for 2018 has increased by around 2.8% to $5.59 per share. The Zacks Consensus Estimate for 2019 has also moved up 9.7% over the same timeframe to $5.56.
Attractive Valuation: Going by the EV/EBITDA (Enterprise Value/ Earnings before Interest, Tax, Depreciation and Amortization) multiple, which is often used to value steel stocks, ArcelorMittal is currently trading at trailing 12-month EV/EBITDA multiple of 4.8, cheaper compared with the industry average of 7.3.
Upbeat Prospects: ArcelorMittal, in its second-quarter call, said that it now expects global apparent steel consumption to grow in the range of 2-3% in 2018, up from the previous growth expectation of 1.5-2.5%. The company noted that market conditions are favorable and demand environment continues to be positive along with healthy steel spreads.
In the United States, the company projects apparent steel consumption growth of 2-3% in 2018 (up from 1.5-2.5% expected earlier), factoring in higher construction and machinery demand. The company also anticipates 2-3% growth in apparent steel consumption in Europe, up from 1-2% expected earlier, supported by strength across construction and machinery end-use markets.
Apparent steel consumption in China is also expected to increase 1-2% (up from -0.5% to 0.5%) in 2018, driven by consistent improvement in real estate demand, ongoing strong machinery and automotive demand, partly offset by slowdown in infrastructure.
ArcelorMittal remains focused on implementing strategic measures under its Action 2020 plan to drive profitability. The plan is a strategic roadmap for each of the company’s key segments, which targets a structural EBITDA improvement of about $3 billion. The company also remains on track with its cost-reduction actions under the program and is focused on deleveraging its balance sheet. Sustained commitment to reduce debt is leading to lower interest expenses.
ArcelorMittal Price and Consensus
ArcelorMittal Price and Consensus | ArcelorMittal Quote
Other Stocks to Consider
Other top-ranked stocks worth considering in the basic materials space include Nucor Corporation (NUE - Free Report) , BHP Billiton Limited (BHP - Free Report) and Huntsman Corporation (HUN - Free Report) , each carrying a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Nucor has an expected long-term earnings growth rate of 12%. The company’s shares have gained around 20% in a year.
BHP Billiton has an expected long-term earnings growth rate of 5.3%. The company’s shares have gained around 23% in a year.
Huntsman has an expected long-term earnings growth rate of 8.5%. The company’s shares have gained around 7% in a year.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>