Arcelor Mittal (MT - Get Report), the world's largest steel maker, has seen its stock price fall by more than half over the past year -- and more than 85% since 2007. Investors are clearly concerned that a weak global economy will crimp steel demand, turning profits into losses.
Yet analysts think such a dire outlook is unwarranted for this Luxembourg-based firm. Thanks to a series of plant closures, Arcelor Mittal is operating in a very lean fashion right now, which should help the company to remain profitable, even as steel pricing and demand languish. The company is expected to earn around $1.50 a share this year, and with modest improvements in the global economy projected for 2013, should see EPS move north of $2.50. That means shares trade for less than six times forward earnings.Wondering how this company will do when the global economy is again fully healthy? Arcelor Mittal earned an average of $7 a share from 2003 through 2008, which really brings the $15 stock price into sharp contrast.