Deutsche Bank Downgrades To Hold On ArcelorMittal, Cuts PT To $14.50

In a research report sent to investors today, Deutsche Bank analyst Bastian Synagowitz downgraded shares of of Arcelormittal (NYSE:MT) from a Buy to a Hold rating and cut the price target to $14.50 (from $21), amid the stronger than anticipated decline of iron ore prices. 

Synagowitz noted, “Although the expected steel recovery in the US and Europe has materialized, iron ore prices kept disappointing on the downside, largely absorbing the underlying USD2.5bn EBITDA improvement in Steel in 2014E. While we expect developed markets to continue to recover, risks from iron ore and the Brazilian business have been rising. We cut our EBITDA estimates by 4-18% for 2014-15E based on lower iron ore and Brazil assumptions (still expecting growth in Europe and the US), positioning us 16% below consensus for 2015E (Reuters). While 6.0x EV/EBITDA 2015E suggests good valuation support, we expect earnings downgrades to weigh on sentiment.”

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