ArcelorMittal: Morgan Stanley analysts more cautious
(CercleFinance.com) - ArcelorMittal shares underperformed the Dutch stock market on Friday in the wake of cautious comments from Morgan Stanley, which reduced its target price for the stock.
At around 2.30pm, the stock was down 0.4%, while the AEX, the Amsterdam Stock Exchange's benchmark index, was hovering around equilibrium.
In a report on the European steel sector, the broker explains that it has lowered its target price from E35 to E32.5 after revising its forecasts for raw material prices.
Morgan Stanley acknowledges that "some pockets of value" remain in the sector, notably in ArcelorMittal and Sweden's SSAB, but believes that the growing risks surrounding the steelmakers' results are hampering any chance of upside in the near term.
The broker acknowledges that the ArcelorMittal stock is trading at a discount, but considers that a closing of this gap is unlikely until spot prices recover and its results show a turning point.
Morgan Stanley still has an "overweight" recommendation on the stock.
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