ArcelorMittal has experienced an increase in its stock by almost 50% over the past six months, compared to a 5% gain in the S&P 500 Index. ArcelorMittal’s stock has risen much more sharply than that of its peers, including VALE (NYSE: VALE) which has declined by 4% over the past six months, Cleveland-Cliffs which has fallen 11% during the same period, United States Steel Corporation which has increased by 13% in the last six months, and Nucor Corp (NYSE: NUE) which has dropped 6% over the same period.
The rise in ArcelorMittal’s stock is primarily due to the company reporting better-than-expected earnings for Q4 2024. The steel giant recorded adjusted earnings of $0.52 per share, and revenue of $14.71 billion. Although revenue fell by 3% in Q4 compared to the previous quarter, the market responded favorably to the earnings and ArcelorMittal’s ongoing decarbonization initiatives, which investors view as a long-term value driver. Additionally, the company remains optimistic about global steel demand, particularly outside China, with anticipated growth between 2.5% and 3.5% in 2025.
We estimate MT stock at approximately $30 per share, roughly 10% below the current market price. Notably, the stock is at levels similar to those in late 2022. Furthermore, if you are seeking potential upside with a smoother ride than holding an individual stock, consider the High Quality portfolio, which has outperformed the S&P and delivered over 91% returns since its inception.
Factors that Influenced Changes in ArcelorMittal Stock
Part of the stock’s rise over the past six months can be attributed to an approximate 55% growth in ArcelorMittal’s earnings per share, which increased from $1.10 in 2023 to $1.70 in 2024. Although revenue growth surged in 2021 and 2022, it was more subdued in 2023 and 2024 due to lower steel prices.
Although ArcelorMittal has experienced inconsistent revenue growth in recent years, its price-to-sales (P/S) multiple has increased. The company’s P/S multiple rose from 0.27 in 2020 to 0.34 in 2023. Now, with a P/S of 0.44, there is a potential downside when compared to previous levels of 0.38 at the end of 2021 and 0.27 at the end of 2022.
The growth in MT stock over the past four years has been quite inconsistent, with annual returns exhibiting greater volatility than the S&P 500. The stock delivered returns of 40% in 2021, -16% in 2022, 10% in 2023, and -17% in 2024. In contrast, the Trefis High Quality Portfolio, which comprises 30 stocks, has been much less volatile and has comfortably outperformed the S&P 500 over this four-year period. Why is that? As a group, HQ Portfolio stocks have provided better returns with lower risk compared to the benchmark index – offering a smoother ride, as demonstrated in
HQ Portfolio performance metrics. Given the current uncertain macroeconomic environment—with rate cuts and multiple conflicts—could MT face a similar scenario as in 2023 and 2024 and underperform the S&P over the next 12 months, or will it experience a strong surge?
What to Expect from ArcelorMittal Stock
ArcelorMittal has demonstrated robust recent performance, driven by an optimistic outlook for steel demand in 2025. The company reported an EBITDA of $1.65 billion for Q4. Although its full-year operating profit declined to $7.05 billion from $8.74 billion in 2023, the EBITDA per tonne remained well above pre-COVID levels despite economic challenges. Furthermore, ArcelorMittal expects global steel consumption (excluding China) to increase by 2.5% to 3.5% in 2025, spurred by restocking and higher demand. Capital expenditures are projected to remain between $4.5 billion and $5 billion, with significant investments in Brazil, India, and the United States. Additionally, the company plans to return at least 50% of its post-dividend free cash flow to shareholders through share buybacks. See our analysis on ArcelorMittal Valuation: Is MT Stock Expensive Or Cheap? for more information on the factors influencing our valuation of ArcelorMittal. See our analysis of ArcelorMittal revenues for additional details on the company’s key revenue streams and their expected trends.
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