On Jan 2, Zacks Investment Research upgraded steel giant
) to a Zacks Rank #1 (Strong Buy).
Why the Upgrade?
ArcelorMittal raked in better-than-expected third-quarter 2013
results on Nov 7, helped by its cost reduction measures. Its
adjusted loss was narrower than the Zacks Consensus Estimate.
Revenues fell modestly but beat expectations. Shipments rose on a
year over year basis in the quarter.
ArcelorMittal expects that profitability for 2013 will be driven
by rise in steel and marketable iron ore shipments as well as
realized benefits from Asset Optimization and Management Gains
initiatives. The company envisions Asset Optimization to deliver
meaningful savings this year.
ArcelorMittal is expanding its steel-making capacity and raw
materials self-sufficiency through a combination of brownfield
growth, new greenfield projects and acquisition opportunities,
mainly in emerging markets.
ArcelorMittal is also highly focused on reducing debt, lowering
costs and improving efficiency. The company maintains its $15
billion medium-term net debt target. On the cost-saving front,
ArcelorMittal is progressing with a new $3 billion cost
optimization program that mostly focuses on variable cost
reductions in its plants.
The company is also progressing with its mining growth projects
and is on track to boost iron ore production capacity in its own
mines to 84 million tons by 2015 from 56 million tons in 2012. A
second phase expansion in its operations in Liberia is currently
Other Stocks to Consider
Other companies in the steel and related industries with
favorable Zacks Rank are
Companhia Siderurgica Nacional
AK Steel Holding Corporation
Worthington Industries, Inc.
). While Companhia Siderurgica holds a Zacks Rank #1 (Strong
Buy), both AK Steel and Worthington Industries retain a Zacks
Rank #2 (Buy).
AK STEEL HLDG (AKS): Free Stock Analysis
ARCELOR MITTAL (MT): Free Stock Analysis
CIA SIDERUR-ADR (SID): Free Stock Analysis
WORTHINGTON IND (WOR): Free Stock Analysis
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