ArcelorMittal (MT) AI Stock Analysis

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ArcelorMittal

(NYSE:MT)

73Outperform

ArcelorMittal exhibits a solid financial standing with notable recovery in revenue and profitability, strong technical momentum, and a fair valuation. The company's strategic focus and positive outlook from the earnings call support growth prospects, though caution is warranted due to challenges in Europe and geopolitical risks.

ArcelorMittal (MT) vs. S&P 500 (SPY)

Market Cap

$20.00B

Dividend Yield1.75%

Average Volume (3M)2.89M

Price to Earnings (P/E)14.3

Beta (1Y)1.09

Revenue Growth-8.56%

EPS Growth68.36%

CountryUS

Employees125,416

SectorBasic Materials

Sector Strength52

IndustrySteel

Share Statistics

EPS (TTM)1.66

Shares Outstanding852,809,750

10 Day Avg. Volume2,350,194

30 Day Avg. Volume2,893,562

Financial Highlights & Ratios

PEG Ratio0.21

Price to Book (P/B)N/A

Price to Sales (P/S)1.67

Price to Cash Flow (P/CF)N/A

P/FCF Ratio0.00

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$32.61

Price Target Upside20.91% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering3

ArcelorMittal Business Overview & Revenue Model

Company DescriptionArcelorMittal (MT) is a leading global steel and mining company with a presence in over 60 countries. The company is known for producing a wide range of steel products, including flat and long steel, as well as specialty products for various industries such as automotive, construction, and energy. ArcelorMittal operates a vertically integrated business model, encompassing mining, steel production, and distribution, which allows it to manage the entire supply chain efficiently.

How the Company Makes MoneyArcelorMittal makes money through the production and sale of steel and mining products. Its primary revenue stream is the sale of steel products, which include flat products like slabs, hot- and cold-rolled coils, and coated steel, as well as long products such as wire rods, rebars, and sections. The company also generates revenue from its mining operations, which supply iron ore and coal to its steel production facilities and external customers. Additionally, ArcelorMittal engages in strategic partnerships and joint ventures to enhance its market presence and optimize its operations. Factors such as global steel demand, raw material prices, and production efficiency significantly influence its earnings.

ArcelorMittal Financial Statement Overview

Summary

ArcelorMittal's financial performance is steady with a recovery in revenue and improved gross margins in 2024. The balance sheet shows strength with a low debt-to-equity ratio and high equity ratio, though ROE has declined. Cash flow generation is robust compared to net income, but the decline in free cash flow growth is a concern.

Income Statement

Positive

ArcelorMittal's income statement shows a mixed performance. The company has experienced fluctuations in revenue, with a decline from 2022 to 2023 but a recovery by 2024. Gross profit margin improved in 2024 (10.05%) compared to 2023 (6.94%), indicating better cost management. However, the net profit margin remains relatively low at 2.14% in 2024. The EBIT margin in 2024 is 5.30%, showing a moderate operational efficiency, while the EBITDA margin is stronger at 10.05%.

Balance Sheet

Positive

The balance sheet of ArcelorMittal reflects a stable financial position with an equity ratio of 55.07% in 2024, which indicates a strong capital structure. The debt-to-equity ratio is manageable at 0.24, suggesting a moderate leverage level. However, the return on equity has declined to 2.72% in 2024, pointing to a reduction in profitability.

Cash Flow

Positive

Cash flow analysis for ArcelorMittal indicates a significant drop in free cash flow from 2023 to 2024, leading to a negative free cash flow growth rate. The operating cash flow to net income ratio is 3.62 in 2024, indicating robust cash generation relative to net income. However, the free cash flow to net income ratio is lower at 0.33, highlighting challenges in converting net income into cash flow.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
62.44B	68.28B	79.84B	76.57B	53.27B
	Gross Profit
6.27B	4.74B	12.54B	19.23B	4.13B
	EBIT
3.31B	2.34B	10.27B	16.98B	-1.32B
	EBITDA
6.27B	4.65B	12.92B	19.15B	5.26B
	Net Income Common Stockholders
1.34B	919.00M	9.30B	20.48B	-578.00M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
6.48B	7.69B	9.41B	4.37B	5.96B
	Total Assets
89.39B	93.92B	94.55B	90.51B	82.05B
	Total Debt
11.56B	10.68B	11.65B	8.40B	12.32B
	Net Debt
5.16B	3.00B	2.24B	4.03B	6.36B
	Total Liabilities
38.10B	37.85B	38.96B	39.17B	41.81B
	Stockholders Equity
49.22B	53.96B	53.15B	49.11B	38.28B
Cash Flow		Free Cash Flow
447.00M	3.03B	6.74B	6.90B	1.64B
	Operating Cash Flow
4.85B	7.64B	10.20B	9.90B	4.08B
	Investing Cash Flow
-4.99B	-5.85B	-4.48B	-340.00M	-2.01B
	Financing Cash Flow
-680.00M	-3.67B	-477.00M	-10.90B	-1.50B

ArcelorMittal Technical Analysis

Technical Analysis Sentiment

Negative

Last Price26.97

Price Trends

50DMA

28.92

Negative

100DMA

26.48

Positive

200DMA

24.89

Positive

Market Momentum

MACD

0.13

Positive

RSI

43.18

Neutral

STOCH

9.32

Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For MT, the sentiment is Negative. The current price of 26.97 is below the 20-day moving average (MA) of 29.51, below the 50-day MA of 28.92, and above the 200-day MA of 24.89, indicating a neutral trend. The MACD of 0.13 indicates Positive momentum. The RSI at 43.18 is Neutral, neither overbought nor oversold. The STOCH value of 9.32 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for MT.

ArcelorMittal Risk Analysis

ArcelorMittal disclosed 37 risk factors in its most recent earnings report. ArcelorMittal reported the most risks in the “Production” category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

ArcelorMittal Peers Comparison

Overall Rating

UnderperformOutperform

Sector (47)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
RS	77 Outperform	$13.93B	16.78	11.71%	1.72%	-6.56%	-31.89%
MT	73 Outperform	$20.00B	14.31	2.60%	1.75%	-8.56%	68.36%
STLD	73 Outperform	$16.64B	11.28	17.27%	1.70%	-6.68%	-32.96%
NUE	71 Outperform	$24.22B	12.41	9.79%	2.10%	-11.46%	-53.33%
PKX	65 Neutral	$12.65B	17.21	2.06%	3.92%	-9.67%	-37.38%
X	57 Neutral	$10.08B	28.47	3.43%	0.45%	-13.48%	-56.94%
Sector *	47 Neutral	$2.43B	-2.83	-21.76%	3.74%	4.16%	-28.82%

* Basic Materials Sector Average

Performance Comparison

ArcelorMittal

26.97

-0.20

-0.74%

NUE

Nucor

115.50

-79.46

-40.76%

PKX

POSCO

45.60

-27.30

-37.45%

Reliance Steel

280.28

-46.70

-14.28%

STLD

Steel Dynamics

122.65

-19.78

-13.89%

United States Steel

45.14

2.75

6.49%

ArcelorMittal Earnings Call Summary

Earnings Call Date: Feb 6, 2025 | % Change Since: 5.85% | Next Earnings Date: May 2, 2025

Earnings Call Sentiment Neutral

ArcelorMittal's performance in 2024 demonstrated resilience and strategic growth despite challenging market conditions and geopolitical issues. The company reported strong financial metrics, strategic project contributions, and significant shareholder returns. However, delays in project execution, challenges in Europe, and geopolitical and import pressures in key markets pose risks. Overall, the company shows a positive outlook with continued focus on strategic investments and decarbonization.

Highlights

Resilient Financial Performance

ArcelorMittal delivered $7.1 billion EBITDA for 2024 despite challenging market conditions, translating to $130 EBITDA per ton shipped, nearly double the previous cycle lows.

Investable Cash Flow Generation

The company generated $2 billion of investable cash flow in 2024, with a total of $21 billion since 2021, enabling strategic investments and shareholder returns.

Strategic Project Contributions

High-return strategic projects are expected to contribute $1.9 billion to structural EBITDA, with $400 million in 2025 and $600 million in 2026.

Shareholder Returns

Dividend increased to $0.55 per share, a 10% increase over the previous year, and share buybacks reduced share count by 37% over four years.

Decarbonization Progress

ArcelorMittal's absolute carbon emissions are approximately half of 2018 levels, with significant investments in economic decarbonization and low-carbon solutions.

Robust Project Execution in Select Regions

Successful completion and rapid ramp-up of the Vega project in Brazil, demonstrating effective project execution in certain regions.

Lowlights

Challenges in Europe

High energy prices and increased imports have challenged the European operations, with trade actions and climate regulation needed to improve competitiveness.

Delays in Strategic Projects

Three strategic projects (Mardyck, Barra Mansa, Serra Azul) experienced delays due to equipment supply issues and lack of project experience, impacting expected EBITDA contributions.

Operational Losses in Ukraine

Ukraine operations are operating at 30% capacity, resulting in cash losses despite being EBITDA breakeven due to ongoing geopolitical challenges.

Import Challenges in India

The Indian market is facing challenges due to import pressures, with the government evaluating safeguard actions to support domestic growth.

Potential Impact of Trade Tariffs

Potential re-emergence of trade tariffs in NAFTA could impact operations, reminiscent of the $100 million quarterly cost impact from previous tariffs.

Company Guidance

During the call discussing ArcelorMittal's performance and progress in 2024, the company provided several key metrics and guidance for the future. They reported an EBITDA of $7.1 billion for the year, translating to $130 of EBITDA per ton shipped, almost double the previous cycle lows. The company generated $2 billion in investable cash flow and invested $1.3 billion in strategic growth projects. They announced a 10% increase in dividend to $0.55 per share, reflecting an 80% increase since 2020. ArcelorMittal is forecasting slightly positive demand growth in 2025 and expects to capture $400 million of incremental EBITDA in 2025 and an additional $600 million in 2026 from its strategic projects. They also highlighted a 50% reduction in carbon emissions compared to 2018 levels and maintained a focus on generating positive cash flow and returning capital to shareholders through dividends and buybacks, having reduced their share count by 37% over the last four years.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.