Now trading at a price of $27.16, Arcelor Mittal has moved -3.4% so far today.
Arcelor Mittal returned gains of 8.5% last year, with its stock price reaching a high of $32.49 and a low of $19.25. Over the same period, the stock underperformed the S&P 500 index by -9.0%. As of April 2023, the company's 50-day average price was $27.48. ArcelorMittal S.A., together with its subsidiaries, operates as integrated steel and mining companies in the Americas, Europe, Asia, and Africa. Based in Luxembourg City, Luxembourg, the large-cap Industrials company has 154,352 full time employees. Arcelor Mittal has offered a 1.6% dividend yield over the last 12 months.
Wider Gross Margins Than the Industry Average of 26.23%:
| 2019-12-31 | 2020-12-31 | 2021-12-31 | 2022-12-31 | |
|---|---|---|---|---|
| Revenue (MM) | $70,615 | $53,270 | $76,571 | $79,844 |
| Gross Margins | 95.7% | 7.8% | 25.1% | 15.7% |
| Operating Margins | -0.9% | 4.0% | 22.2% | 12.9% |
| Net Margins | -3.48% | -1.38% | 19.53% | 11.65% |
| Net Income (MM) | -$2,454 | -$733 | $14,956 | $9,302 |
| Net Interest Expense (MM) | -607 | -1,220 | -956 | -510 |
| Net Interest Expense (MM) | -$607 | -$1,220 | -$956 | -$510 |
| Depreciation & Amort. (MM) | -$4,994 | -$2,827 | -$2,305 | -$3,606 |
| Earnings Per Share | -$2.42 | -$0.64 | $13.49 | $7.17 |
| EPS Growth | n/a | 73.55% | 2207.81% | -46.85% |
| Diluted Shares (MM) | 1,013 | 1,140 | 1,108 | 1,042 |
| Free Cash Flow (MM) | $2,445 | $1,643 | $6,897 | $6,735 |
| Capital Expenditures (MM) | -$3,572 | -$2,439 | -$3,008 | -$3,468 |
| Net Current Assets (MM) | -$18,809 | -$13,842 | -$4,229 | -$1,839 |
| Current Ratio | 1.34 | 1.23 | 1.45 | 1.66 |
| Long Term Debt (MM) | $11,471 | $9,815 | $6,488 | $9,067 |
| Net Debt / EBITDA | 2.59 | 1.28 | 0.26 | 0.15 |
Arcelor Mittal benefits from growing revenues and a flat capital expenditure trend, exceptional EPS growth, and low leverage. The company's financial statements show wider gross margins than its peer group and generally positive cash flows. However, the firm has weak operating margins with a positive growth rate. Finally, we note that Arcelor Mittal has a decent current ratio.
Arcelor Mittal Is Potentially Undervalued and Trades Below Its Graham Number:
Arcelor Mittal has a trailing twelve month P/E ratio of 3.8, compared to an average of 20.49 for the Industrials sector. Based on its EPS guidance of $5.37, the company has a forward P/E ratio of 5.1. According to the 26.3% compound average growth rate of Arcelor Mittal's historical and projected earnings per share, the company's PEG ratio is 0.15. Taking the weighted average of the company's EPS CAGR and the broader market's 5-year projected EPS growth rate, we obtain a normalized growth rate of 10.6%. On this basis, the company's PEG ratio is 0.36. This suggests that its shares are undervalued. Additionally, the market is possibly undervaluing Arcelor Mittal in terms of its equity because its P/B ratio is 0.9 whereas the sector average is 3.78. The company's shares are currently trading -50.3% below their Graham number.
Arcelor Mittal Has an Analyst Consensus of Strong Upside Potential:
The 4 analysts following Arcelor Mittal have set target prices ranging from $33.68 to $40.4 per share, for an average of $37.52 with a buy rating. As of April 2023, the company is trading -26.8% away from its average target price, indicating that there is an analyst consensus of strong upside potential.
The largest shareholder is GQG Partners LLC, whose 1% stake in the company is worth $128,434,929.
