Value
6.8/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 7.5 |
| P/S | 9.8 |
| EV/EBITDA | 0.0 |
| Fwd P/E | 9.4 |
| PEG | 10.0 |
| Analyst target | 3.0 |
- ▸Forward P/E: 9.1x
- ▸PEG: 0.11
MT · Why this verdict
Why Arcelor Mittal NY Registry Shar (MT) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictSELL
Overall score5.4/10
ConfidenceMEDIUM
MacroNEUTRAL
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
The forward price-to-earnings ratio is 9.9x with a forward-to-trailing ratio of 0.55x, indicating that current earnings estimates may be built on elevated steel prices that could mean-revert, leaving the forward earnings estimate overstated. Bear case | Forward earnings estimates remain stable or increase over the next 2 quarters, validating that current steel pricing is sustainable. | →Stable |
| CounterA Piotroski F-Score of 7/9 and 3 of 4 recent quarters beating estimates at an average of +12.0% suggest near-term execution has been solid, and commodity prices may remain elevated longer than the cycle-peak signal implies. | ||
At the current price of $69.21, the stock has surpassed analyst price targets with estimated upside of only 2.7% to resistance at $71.05, while downside risk to the stop at $64.37 is 7.0%, making the risk-reward unfavorable. Targets | Analysts revise price targets above $85 within 6 months on improving steel demand signals, restoring a positive risk-reward. | →Stable |
| CounterWith limited analyst coverage dampening the signal and a macro commodity cycle peak warning in place, upward analyst revisions are unlikely without a concrete inflection in steel demand or supply reduction. | ||
ArcelorMittal scores 2.8/10 on quality, with return on assets of 0.7%, near-zero gross margin contribution, and free cash flow at -69% of net income, flagging poor earnings quality and limited competitive advantage in a commoditized steel market. Quality breakdown | Free cash flow conversion improves above 0% of net income within 12 months as capital expenditure normalizes. | →Stable |
| CounterThe Piotroski F-Score of 7/9 signals improving financial health across multiple dimensions, and the near-zero gross margin score reflects the commodity nature of steel rather than a structural competitive deficit. | ||
Despite quality concerns, the stock trades above its 200-day moving average with rising volume accumulation (on-balance volume increasing), and momentum scores a respectable 5.1/10, providing some technical support at current levels. Momentum breakdown | The stock remains above its 200-day moving average for at least 6 of the next 12 months. | →Stable |
| CounterLow trading volume (volume score 1.0/10) suggests the price rise has occurred on thin participation, which makes the above-trend position fragile and vulnerable to a reversal on any negative catalyst. | ||
The forward price-to-earnings ratio is 9.9x with a forward-to-trailing ratio of 0.55x, indicating that current earnings estimates may be built on elevated steel prices that could mean-revert, leaving the forward earnings estimate overstated.
→StableBear case
- Expectation
- Forward earnings estimates remain stable or increase over the next 2 quarters, validating that current steel pricing is sustainable.
CounterA Piotroski F-Score of 7/9 and 3 of 4 recent quarters beating estimates at an average of +12.0% suggest near-term execution has been solid, and commodity prices may remain elevated longer than the cycle-peak signal implies.
At the current price of $69.21, the stock has surpassed analyst price targets with estimated upside of only 2.7% to resistance at $71.05, while downside risk to the stop at $64.37 is 7.0%, making the risk-reward unfavorable.
→StableTargets
- Expectation
- Analysts revise price targets above $85 within 6 months on improving steel demand signals, restoring a positive risk-reward.
CounterWith limited analyst coverage dampening the signal and a macro commodity cycle peak warning in place, upward analyst revisions are unlikely without a concrete inflection in steel demand or supply reduction.
ArcelorMittal scores 2.8/10 on quality, with return on assets of 0.7%, near-zero gross margin contribution, and free cash flow at -69% of net income, flagging poor earnings quality and limited competitive advantage in a commoditized steel market.
→StableQuality breakdown
- Expectation
- Free cash flow conversion improves above 0% of net income within 12 months as capital expenditure normalizes.
CounterThe Piotroski F-Score of 7/9 signals improving financial health across multiple dimensions, and the near-zero gross margin score reflects the commodity nature of steel rather than a structural competitive deficit.
Despite quality concerns, the stock trades above its 200-day moving average with rising volume accumulation (on-balance volume increasing), and momentum scores a respectable 5.1/10, providing some technical support at current levels.
→StableMomentum breakdown
- Expectation
- The stock remains above its 200-day moving average for at least 6 of the next 12 months.
CounterLow trading volume (volume score 1.0/10) suggests the price rise has occurred on thin participation, which makes the above-trend position fragile and vulnerable to a reversal on any negative catalyst.
TrendMatrix Research · core thesis
Engine thesis — one sentence
ArcelorMittal is a cyclical steel producer trading at a forward price-to-earnings ratio of 9.9x, with quality below minimum thresholds and a negative risk-reward position after the stock has already exceeded analyst price targets, making this a cautious hold at best.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Per-dimension breakdown
Quality
2.8/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 1.8 |
| ROA | 0.7 |
| Gross margin | 0.0 |
| Op margin | 1.9 |
| Net margin | 2.4 |
| Current ratio | 5.2 |
| FCF quality | 0.0 |
| Moat | 5.2 |
| Piotroski F | 7.8 |
- ▸Earnings quality RED FLAG: -69% FCF/NI
- ▸No competitive moat
- ▸Strong Piotroski F-Score: 7/9
- ▸Quality concerns
Growth
6.8/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 3.6 |
| EPS growth | 10.0 |
Momentum
6.0/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 7.9 |
| MACD | 0.0 |
| OBV | 10.0 |
| MA position | 9.0 |
| Volume | 2.9 |
- ▸Uptrend pullback (RSI 36) - buy opportunity
- ▸Volume accumulation (rising OBV)
- ▸Above 200-day MA
Sentiment
5.7/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 6.6 |
| Price target | 5.3 |
| erm sentiment | 5.0 |
- ▸Light analyst coverage (6.0) — signal dampened
Insider
5.0/10data confidence 50%Peer rank
3.5/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 5.2 |
| quality rank | 5.4 |
| growth rank | 3.3 |
Technical
5.5/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 4.3 |
| support resistance | 4.8 |
| 52w position | 8.0 |
| gap | 5.0 |
Risk (lower is worse)
6.0/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 9.6 |
| days to cover | 9.4 |
| volatility | 4.5 |
| put call | 3.4 |
| implied vol | 1.9 |
| beta | 4.2 |
| debt equity | 9.0 |
- ▸High IV: 68%
Catalyst
6.1/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 6.7 |
| earnings timing | 5.0 |
| surprise avg | 8.5 |
| dividend safety | 5.2 |
- ▸Strong earnings: 3B/1M
- ▸Dividend: 95.0%
How the verdict was assembled
Engine trigger
Quality below minimum threshold.
Engine technical detail
verdict_path:
L1:HARD_BLOCKPassed (7)
- MOMENTUM:6.0>=5.5
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:24d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- ASYMMETRY:-1.1=NEGATIVE
Warning (0)
none
Reward-to-Risk
-1.06
Upside
-11.1%
Downside
10.4%
Sizing output
AVOID
Setup— — No clear chart pattern; technical signals are mixed
EdgeCatalyst-Driven — Earnings in 24d with 3/4 beat streak
SuitabilityAggressive — Beta 1.74>1.3
Investment implication
The L1 gate blocked the positive-verdict path: a hard-floor threshold was breached, so dimensional pillars — including Value at 6.8 could not lift the engine output above the verdict floor. Failed gate signal: ASYMMETRY:-1.1=NEGATIVE.
The strongest dimensions are Value at 6.8, Growth at 6.8, and Catalyst at 6.1; the weakest are Quality at 2.8, Peer rank at 3.5, and Insider at 5.0. The V9 engine flagged 1 failed gate, producing an asymmetric reward-to-risk of -1.06 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Commodity Cycle Peak Risk
Trip ifForward EPS estimates decline by more than 20% from current levels over any 90-day window, signaling commodity price mean-reversion.
- P2Below Floor Quality Metrics
Trip ifFree cash flow falls below 0% of net income for 3 consecutive reported quarters.
- P3Target Reached Negative Upside
Trip ifStock price drops below $64.37, the defined stop-loss level, on a closing basis.
- P4Above Trend Momentum Support
Trip ifStock price falls below its 200-day moving average and on-balance volume declines for more than 20 consecutive sessions.