What's Next For ArcelorMittal Stock After A 35% Rally?
HAMILTON, CANADA - JUNE 9: Steel coils are seen in a yard at ArcelorMittal Dofasco's steel mill on ... More June 9, 2025 in Hamilton, Canada. (Photo by)
ArcelorMittal (NYSE:MT) has experienced a notable rise recently. Following a period of poor performance, the world's second-largest steel manufacturer has rebounded with better earnings and a strong strategic focus. In Q1 2025, the company reported an EBITDA of $1.58 billion, which exceeded expectations, driven by increased iron ore production (particularly in Liberia) and stable steel shipments. This development has boosted investor confidence — the stock has risen 35% year-to-date. Buy Or Sell MT Stock?
What is fueling this turnaround? Several key factors. First, global steel demand (excluding China) is projected to grow by 2.5–3.5% this year, and ArcelorMittal is strategically positioned to capitalize on this trend, thanks to its presence in rapidly expanding markets like India and infrastructure-heavy regions such as the U.S. The company is also making smart investments — boosting capacity, modernizing facilities (such as the electric arc furnace in Alabama), and increasing high-grade iron ore exports. For investors seeking potential gains with reduced volatility, the High Quality portfolio has significantly outperformed the S&P 500, achieving over 91% returns since inception.
Nevertheless, it's not completely smooth sailing. Steel prices are often cyclical, and with global trade tensions escalating — particularly between the U.S. and China — market sentiment can change quickly. Additionally, the transition to green steel in Europe will necessitate substantial investments and may exert pressure on margins in the short term.
The bottom line? ArcelorMittal stock seems to have much of the short-term optimism already reflected in its price. With a modest forward P/S ratio of around 0.4x over the past twelve months, it still appears inexpensive on paper — however, with rising expectations, limited earnings surprise potential, and macroeconomic risks (including tariffs and steel price fluctuations), any further upside may come gradually unless new growth catalysts arise. In summary, MT appears fairly valued currently, with gains already factored in unless supportive conditions improve. For further insights, see our analysis on ArcelorMittal Valuation: Is MT Stock Expensive Or Cheap?, which details our valuation rationale for ArcelorMittal. Additionally, check out our analysis of ArcelorMittal revenues for more information on the company's primary revenue streams and their expected trends.
Investing in a single stock like MT carries risks. Conversely, the Trefis High Quality (HQ) Portfolio, comprising 30 stocks, has consistently outperformed the S&P 500 over the past 4 years. Why is that? As a collective, HQ Portfolio stocks have delivered superior returns with reduced risk compared to the benchmark index, offering a smoother ride as demonstrated in HQ Portfolio performance metrics.
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