Jefferies has moved ArcelorMittal (NYSE:MT) from a Hold to a Buy rating and raised its price target to EUR62.00 from EUR44.00, citing what it sees as a structurally improved market for European steel. The analyst note frames the upgrade around policy-driven changes in EU trade rules that Jefferies says will materially alter the region's supply picture.
The stock is trading at $65.42, modestly above InvestingPro's calculated Fair Value, after surging 12.7% over the past week and rising 133.6% over the prior 12 months. Jefferies' research projects ArcelorMittal's 2027 EBITDA at $11.7 billion, roughly 15% higher than the consensus estimate of $10.1 billion. By comparison, ArcelorMittal's most recent reported EBITDA stands at $5.9 billion and the company generates annual revenue of $61.35 billion.
Jefferies highlights specific policy shifts as the driver of its optimism for EU steel. Beginning in July 2026, the firm points to a planned 50% reduction in import tariff-rate quotas combined with a doubling of tariffs to 50% on volumes that fall outside the quotas. Jefferies estimates that these measures could lower steel imports into the EU by 10 million tonnes, volumes that would need to be supplied by domestic producers.
According to Jefferies' assessment, cutting imports by that amount could lift EU27 steel production by approximately 8% and push production rates back toward the 80-85% range from current levels of about 60-65%. The firm also expects steel prices to trend higher into 2027 as the supply-demand balance shifts.
InvestingPro data cited in the note underlines ArcelorMittal's scale in the sector, with a market capitalization of $49.66 billion and a PEG ratio of 0.11, which the data suggests may indicate undervaluation relative to growth expectations. Investors seeking greater detail are directed to the comprehensive Pro Research Report for additional financial analysis and projections.
ArcelorMittal's most recent quarterly results were mixed. The company reported fourth-quarter 2025 earnings per share of $0.86, beating the consensus forecast of $0.62 and producing a positive surprise of 38.71%. Revenue for the same quarter, however, came in at $14.97 billion versus an anticipated $15.58 billion, a negative surprise of 3.92%. These results underscore a gap between profit performance and top-line trends in the period reported.
The Jefferies upgrade and optimistic medium-term case rest heavily on anticipated policy implementation and its impact on trade flows and domestic production. The firm projects that reduced low-cost imports - down by roughly 50% in its scenario - will strengthen cyclical EBITDA for EU producers relative to historical norms.
There were no reports of mergers or acquisitions involving ArcelorMittal in the period covered by the note, and other analyst firms had not issued new upgrades or downgrades for the company at the time of Jefferies' action. Investors evaluating ArcelorMittal may weigh the forecast for higher future EBITDA and more supportive EU policy against the company's recent revenue shortfall and the timing risks associated with regulatory changes.
Key considerations for investors include how quickly EU production ramps up to replace reduced imports, the trajectory of steel prices into 2027, and whether ArcelorMittal's profit margins can expand in line with Jefferies' 2027 EBITDA projection.