Analysis and Opinion on ArcelorMittal Equity-May 16, 2022 15:42

ArcelorMittal Stock Analysis and Opinions

ArcelorMittal Stock Analysis and Opinions

Find an analysis of the world’s number one ArcelorMittal stock market in the steel industry. ArcelorMittal’s stock price ambitions, strategies, financial performance and technical analysis in the stock market.

ArcelorMittal: Steel and Mining Specialist

ArcelorMittal Stock Analysis and Opinions

ArcelorMittal Stock Analysis and Opinions

With an annual production capacity of 71.5 million tonnes of crude steel and approximately 168,000 employees in 60 countries, ArcelorMittal is a world leader in the steel and mining industry.

With industrial bases in 17 countries, the group dominates all major global steel markets, including automotive, construction, home appliances and packaging, with R & D and technical activities.

ArcelorMittal’s Ambition: Transforming the World of Tomorrow Through Steel

ArcelorMittal has set the challenge of “transforming tomorrow.” This is a promise that reflects the belief that steel will contribute to the construction of infrastructure in the modern world. Steel is an infinitely recyclable and adaptable material, making it a durable material for trains and cars used in everyday commuting. Steel is also present in the buildings we live in, as well as in the sports stadiums and art galleries we visit.

ArcelorMittal Values: Sustainability, Quality, Leadership

When Mittal Steel and Arcelor merged to form the world’s largest steel maker in 2006 The new ArcelorMittal Group was founded on three values: sustainability, quality and leadership...

Sustainability by evolving steel to secure a better future for the industry and the next generation. To ensure that the quality, the steel produced is at the forefront of technology and the best professionals are in charge of this production. We will take leadership so that each team can develop their own visionary ideas and maximize the power of the company.

ArcelorMittal Group Strategy: Diversification of Production and Distribution

ArcelorMittal has been pursuing a three-dimensional business strategy for many years, emphasizing product diversity, geographic scope, and business diversification, both upstream in iron ore production and upstream in coal and downstream in steel distribution. rice field.

Obviously, this is a scale strategy to strengthen steel and mining activities across all parts of the world.

Steel and Mining: Is it a difficult situation for ArcelorMittal, who is facing the current energy crisis?

ArcelorMittal operates in a difficult environment of energy crisis and rising costs. raw materials.. Indeed, the steel industry is very energy intensive. It currently accounts for 8% of the world’s final energy consumption.Increased energy prices caused by War in Ukraine Therefore, it affects the production cost of ArcelorMittal.

but, Steel demand is expected to increase by 2.7% in 2022 And ArcelorMittal will certainly be able to take advantage of its leading position in the market to raise selling prices in proportion to increasing production costs.

The steel industry also needs to adapt to the reality of new energy. Europe is thinking of reducing its dependence on fossil fuels in the long run, but remember that the steel industry is a particular consumer of coal.The latter almost covers 75% Energy demand in this industry, According to the IEA.. Therefore, the steel industry needs to find another source of energy to be able to continue its activities in the long run.

Various activities of ArcelorMittal

ArcelorMittal is the world’s number one steel manufacturer and leader in all major global steel markets, including automotive, construction, consumer electronics and packaging. Net sales are categorized by activity as follows:

•• Sales of flat steel (54.7%) : Hot and cold rolled steel coils, coated sheets, etc. ;
•• Sales of long carbon steel (23.7%) : Beams, rebar, merchant bars, wire rods, sewing wires, sheet piles, public transport rails, special sections, wire drawing products.
•• Sales of tubular products (2.9%) ;
•• Sales of iron ore and coal (2.4%) ;
•• Others (16.3%) : Mainly steel conversion, distribution and trading.

The geographical breakdown of ArcelorMittal’s revenue is as follows: Germany (8.5%), Poland (6.9%), France (6.4%), Spain (5.5%), Europe (27.8%), United States (9.5%), United States (23.7%), Asia and Africa (11.7%) ).

Fundamental analysis of the major steel group ArcelorMittal

ArcelorMittal published the results for the first quarter of 2022 on March 31st. On this occasion, the company recalled that it had shut down its business in Ukraine at the beginning of the war in order to protect its personnel and assets. After that, one of the three blast furnaces was operated and the operation was slowly resumed. Despite this context Inflationary pressure Globally, ArcelorMittal achieved strong results in the first quarter, thanks to the resilience of its business model.

Quarterly sales of $ 21.8 billion

Revenue for the first quarter of 2022 $ 21.8 billionversus $ 20.8 billion In the fourth quarter of 2021 $ 16.2 billion In the first quarter of 2021. First quarter revenue of 2022 + 34.8% Mainly due to a significant increase in average steel selling prices compared to the first quarter of 2021 (+ 46.0%).

Decrease in steel shipments

Total steel shipments for the first quarter of 2022 15.3 million tonsDecrease 2.7% In connection with 15.8 million tons For the fourth quarter of 2021.

EBITDA stable at $ 5.1 billion compared to Q4 2021

Business results $ 4.4 billion First quarter of 2022 (vs. $ 4.6 billion 4th quarter of 2021) and EBITDA $ 5.1 billion First quarter of 2022 (vs. $ 5.1 billion In the fourth quarter of 2021).

$ 400 Million Positive Net Income

ArcelorMittal recorded net income $ 4,125 million First quarter of 2022 (EPS is $ 4.28), $ 4,045 million The fourth quarter of 2021 (EPS is $ 3.93) and the net income of the first quarter of 2021 is $ 2,285 million (EPS is $ 1.94).

Decrease in net debt

The total debt amount is $ 8.7 billion At the end of the first quarter of 2022; net debt $ 3.2 billion (Compared to $ 4 billion at the end of 2021).

ArcelorMittal Technical Analysis: The World’s Largest Steel Producer Listed on CAC 40

Graph analysis of ArcelorMittal’s stock price in the stock market

ArcelorMittal Stock Analysis and Opinions

ArcelorMittal Stock Analysis and Opinions

Source: Café de la Bourse, graphs created based on IG, informative data only

Technical analysis of ArcelorMittal’s stock price

ArcelorMittal’s stock price falls 4.5% over 1 year.Move within the channel restricted by the level of support of 23.5 euros (Purple in the graph) and 32 euros (Yellow in the graph). During this period, ArcelorMittal’s stock market performance has been very volatile, with a series of downs and ups in the same quarter. The medium-term trend is neutral. The 50-day (black on the chart) and 100-day (red on the chart) moving averages follow similar trajectories and are in good agreement in the last few sessions. In the short term, this trend is quite negative, with ArcelorMittal’s share price and 20-day moving average (green in the graph) below the 50-day moving average and MACD below the negative signal line. The stochastic RSI is in the neutral zone.

Our Opinion on ArcelorMittal Share

ArcelorMittal has released better-than-expected quarterly results, especially for EBITDA. 5.1 billion Against the consensus 4.57 billion.. Market conditions are good as demand for steel remains high and ArcelorMittal can raise prices. However, the company will face a reliance on fossil fuels in the long run. This is a big challenge for the industry. Attention should also be paid to the technical composition of ArcelorMittal’s stock price.

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