ArcelorMittal (ENXTAM:MT): Examining Valuation After Strong 1-Year Share Price Rally

ArcelorMittal (ENXTAM:MT) shares have caught the attention of investors recently, thanks to a strong run over the past year. The stock has returned 45% in that timeframe, which is ahead of many of its industry peers.

See our latest analysis for ArcelorMittal.

ArcelorMittal’s 1-year total shareholder return of 45% stands out in the sector, particularly after its steady 9% share price climb over the past month. Momentum has been building, as investors are likely responding to improved earnings and ongoing strength in global steel demand.

If you want to see what other fast-rising companies with strong insider backing are capturing attention, now is the perfect moment to discover fast growing stocks with high insider ownership

But after this impressive rally, investors are left to weigh whether ArcelorMittal is trading below its true value or if the market is already fully reflecting its future growth prospects, which may leave little room for further upside.

Most Popular Narrative: 2.3% Overvalued

With ArcelorMittal’s fair value pegged at €31.59 and a last closing price of €32.32, the most popular narrative suggests the shares are trading just slightly above what analysts consider justified. This slim gap highlights debate about the company’s future growth versus near-term risks and raises a key question about whether the current price fully reflects its roadmap.

Strategic investments in green steel production (EAFs, DRI technology, renewable-backed projects) and early execution of decarbonization projects position ArcelorMittal to capture premium, higher-margin demand from eco-conscious customers, driving margin expansion and supporting long-term earnings.

Read the complete narrative.

Want to know what powers this price target? The growth vision hinges on a structural shift in the steel market and industry-leading investments. The narrative points to bold assumptions for revenue, profit margins, and valuation multiples—numbers you might not expect. Curious which strategic moves could radically impact future profits? Unlock the key projections driving this hotly-discussed fair value.

Result: Fair Value of €31.59 (OVERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, risks such as volatile trade tariffs and high green transition costs could quickly shift the outlook and challenge the optimism surrounding ArcelorMittal’s current growth narrative.

Find out about the key risks to this ArcelorMittal narrative.

Another View: Are Shares Actually Undervalued?

While the most popular narrative suggests ArcelorMittal is slightly overvalued, another angle uses the SWS DCF model to estimate fair value. This method finds the stock trading just below its DCF-based fair value, which points to a modest undervaluation. Which view better reflects reality for future returns?

Look into how the SWS DCF model arrives at its fair value.

Build Your Own ArcelorMittal Narrative

If you want to see things differently or prefer making your own assessment, you can easily generate your own narrative with just a few clicks: Do it your way

A great starting point for your ArcelorMittal research is our analysis highlighting 4 key rewards and 1 important warning sign that could impact your investment decision.

Looking for More Smart Investing Ideas?

Don’t let great opportunities slip away. Expand your portfolio potential by searching beyond ArcelorMittal. Simply Wall St’s powerful screeners can help you find exceptional stocks aligned with your unique investing goals.

• Boost your income strategy with steady potential by using these 19 dividend stocks with yields > 3%, featuring companies that consistently offer strong yields above 3%.
• Get ahead of emerging tech trends by tapping into these 24 AI penny stocks to spot early AI leaders and companies growing fast in this booming space.
• Uncover value-driven opportunities in the market with these 899 undervalued stocks based on cash flows, where you’ll find stocks priced below their intrinsic worth based on robust financial models.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com