Aperam: J.P. Morgan downgrades stock

(CercleFinance.com) - On Wednesday, J.
P. Morgan downgraded Aperam shares from "neutral" to "underweight", with a target price (for 2024) cut from E25.1 to E22.7, representing downside potential of around 20% from its current levels.

In a report, the US bank explains that the steelmaker's strong presence in Europe, which is resulting in a smaller footprint in the US, could curb its profit margins between now and 2024.

J.P. Morgan also points out that the stock is trading in line with its historic EV/Ebitda multiple - albeit at a 45% premium to other stainless steel manufacturers, whereas it usually trades in line with the sector.

Against this backdrop, the broker prefers Acerinox and Outokumpu, which it believes benefit from their exposure to the stable US market, more accessible valuation multiples, a higher FCF and solid balance sheet structures.


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