ArcelorMittal (MT) delivered mixed Q3 2021 results, characterized by the highest net income and lowest debt since 2008. A strong pricing environment mostly supported the results as the company also focused on improving its safety performance.
ArcelorMittal is a steel manufacturer and mining company with operations in North and South America. The company produces steel products catering to the needs of various industries, from automotive, to construction and energy. (See Top Smart Score Stocks on TipRanks)
Sales in the quarter totaled $20.23 billion, up from $13.27 billion delivered the same quarter last year. However, it missed consensus estimates of $21.86 billion. Net income attributable to shareholders increased to $4.62 billion compared to a loss of $261 million delivered the same quarter last year.
In addition, ArcelorMittal delivered diluted EPS of $4.16 in Q3, an improvement from a loss of $0.21 a share delivered the same quarter last year. The diluted EPS was lower compared to the consensus estimate of $4.17. EBITDA of $6.1 billion was the highest since 2008, and represented a 19.9% increase from Q2 2021. Net income of $4.6 billion was also the highest since 2008.
Strong cash flow in Q3 2020 allowed ArcelorMittal to increase its buyback by a further $1 billion, bringing the total buyback since September of last year to $6 billion.
During the quarter, the company teamed up with the Canadian government and committed to invest C$1.8 billion to reduce CO2 emissions at Dofasco. The company also signed a letter of intent with the government of Belgium and Flanders in support of decarbonization technologies.
Last month, Credit Suisse analyst Carsten Riek upgraded the stock to a Buy and raised the price target to $42 from $34, implying 33.5% upside potential to current levels.
Consensus among analysts is a Strong Buy based on four Buys and one Hold. The average ArcelorMittal price target of $48.84 implies 55.2% upside potential to current levels.