UPDATE: Societe Generale Upgrades ArcelorMittal to Buy; Negative Newsflow Ending
Societe Generale raised its rating on ArcelorMittal (NYSE: MT) from Hold to Buy on expectations that negative catalysts are coming to and end and a relative valuation that appears favorable.
Societe Generale noted, "We believe that the risk of incremental bad news is declining fast after Moody's decision to downgrade AM's rating to junk (vs investment grade). ... We also think that this latest downgrade may relieve some pressure on AM's management (i.e. more time to execute its asset disposal plans and greater potential to sell at a premium to book value), while some core assets could be removed from the disposal list. Last but not least, we note that AM's valuation is currently at an all-time low (0.4x book value), while the share should benefit from a sequential improvement in steel fundamentals vs Q4's very low levels."
ArcelorMittal closed at $15.81 on Tuesday.
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