Rating Change #6
has been downgraded by TheStreet Ratings from hold to sell. The company's weaknesses can be seen in multiple areas, such as its feeble growth in its earnings per share, deteriorating net income, disappointing return on equity, poor profit margins and weak operating cash flow.
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Highlights from the ratings report include:
- ARCELORMITTAL SA has exprienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. Earnings per share have declined over the last year. We anticipate that this should continue in the coming year. During the past fiscal year, ARCELORMITTAL SA reported lower earnings of $0.86 versus $1.67 in the prior year. For the next year, the market is expecting a contraction of 61.6% in earnings ($0.33 versus $0.86).
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Metals & Mining industry. The net income has significantly decreased by 207.6% when compared to the same quarter one year ago, falling from $659.00 million to -$709.00 million.
- Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Metals & Mining industry and the overall market on the basis of return on equity, ARCELORMITTAL SA underperformed against that of the industry average and is significantly less than that of the S&P 500.
- The gross profit margin for ARCELORMITTAL SA is currently extremely low, coming in at 6.50%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -3.60% is significantly below that of the industry average.
- Net operating cash flow has significantly decreased to -$789.00 million or 202.46% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
ArcelorMittal, together with its subsidiaries, operates as an integrated steel and mining company worldwide. The company has a P/E ratio of 16.7, below the S&P 500 P/E ratio of 17.7. ArcelorMittal has a market cap of $23.33 billion and is part of the basic materials sector and metals & mining industry. Shares are down 17.3% year to date as of the close of trading on Tuesday.
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