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JPMorgan analyst Dominic O'Kane has adjusted the price target for ArcelorMittal to EUR 28.50 from EUR 29, maintaining a Neutral stance. The company's financial health is mixed, with a 1.4% decline in revenue growth over the past year and a net margin of 1.94%. ArcelorMittal's valuation metrics suggest a modestly overvalued position, with a P/E ratio of 9.38. The company's Altman Z-Score of 1.25 places it in the distress zone, indicating a potential risk of bankruptcy.

ArcelorMittal, the world's leading integrated steel and mining company, released its financial results for the first half of 2025, highlighting a mixed financial picture with strategic growth initiatives underway. The company reported a 1.4% decline in revenue growth over the past year and a net margin of 1.94%, according to JPMorgan analyst Dominic O'Kane, who adjusted the price target to EUR 28.50 [1].

The company's Q2 2025 EBITDA was $1.9 billion, with a margin of $135 per tonne, showing improvement compared to prior cycles. Net income for the quarter was $1.8 billion, positively impacted by $0.8 billion in exceptionals. Adjusted net income was $1.0 billion, with an adjusted EPS of $1.32 per share. The company's operational momentum was evident with record iron ore production and shipments from Liberia, which is on track to achieve its full expanded 20Mt capacity by the end of 2025 [1].

ArcelorMittal's financial strength was maintained with a net debt of $8.3 billion at the end of the quarter, an increase of $1.5 billion from the prior quarter end due to M&A impacts. Liquidity remained robust at $11.0 billion. The company generated investable cash flow of $2.3 billion over the past 12 months, investing $1.1 billion in strategic capex projects and returning $1.1 billion to shareholders via dividends/buybacks [1].

The company's strategic growth initiatives include the acquisition of Nippon Steel's 50% stake in AM/NS Calvert, gaining full control of one of North America's most advanced steel-making facilities. The acquisition of Brazilian pipe producer Tuper and regaining control of AMTBA are expected to accelerate growth in high-value tubular and automotive markets in North America. The company's mining operations in Liberia also demonstrated the benefits of diversification, delivering another quarter of record iron-ore production and shipments [1].

ArcelorMittal's valuation metrics suggest a modestly overvalued position, with a P/E ratio of 9.38. The company's Altman Z-Score of 1.25 places it in the distress zone, indicating a potential risk of bankruptcy, according to JPMorgan analyst Dominic O'Kane. Despite these challenges, the company's strong balance sheet and diverse business model allow it to invest in growth while delivering consistent shareholder returns through its ongoing program of share buybacks [1].

The company is also encouraging the EU to turn the Steel and Metals Action Plan into concrete actions, which could support improved domestic steel capacity utilization rates and restore the industry's health. ArcelorMittal Management will host a conference call for members of the investment community to present and comment on the three-month period ended June 30, 2025 [1].

References:
[1] https://corporate.arcelormittal.com/media/press-releases/arcelormittal-1h-q2/